Activities

1. The following cost and activity data were taken from factory records.

Cost incurred (y) ($)	Activity (x) (Units)
112	8
124	10
160	14
144	14
176	18
188	20

a. Use the Least Squares Method of Linear Regression to calculate the fixed and variable cost.

b. Calculate total cost if activity is 30 units.

1. DG Co has recorded the following total costs during the last five years.

Year Output volume Units Total cost $

2010 65,000 145,000

2011 80,000 162,000

2012 90,000 170,000

2013 60,000 140,000

2014 75,000 160,000

Required

Calculate the total cost that should be expected in 2015 if output is 85,000 units.

a. Using High-low method

b. Using the Least squared method

3. The following costs were reported by XYZ Company.

Period Units Produced Costs ($)

1 340 2,260

2 300 2,160

3 400 2,300

4 420 2,400

1. 360 2,266

1. Use the High-low Method to calculate the fixed costs per month and the variable costs per unit.
2. The following costs were observed over several periods in a manufacturing company.

Production level (units) Total costs ($)

Period 1 8,112

Period 2 10,124

Period 3 14,160

Period 4 14,144

Period 5 18,176

Period 6 20,188

Required

Using the Least Square Method of Linear Regression, determine the:

1. variable cost per unit and total fixed cost
2. total cost at an estimated production level of 22 units and 24 units.