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Butterfly Company is attempting to forecast monthly repair and maintenance expense for the machines used to manufacture product. The accounting staff believes that machine operating
Butterfly Company is attempting to forecast monthly repair and maintenance expense for the machines used to manufacture product. The accounting staff believes that machine operating hours are the primary cost driver. You examine monthly machine operating hours and monthly repair and maintenance expense for the past 18 months and discover that the high level of production operation used 2,800 machine hours and the low level of operation used 800 machine hours. The repair and maintenance expense associated with the high level of activity was $9.900 and expense at the low level of activity was $4.800. 1. What is the cost formula (be sure to write the correct format including the correct identification of the variables) for forecasting machine repair and maintenarice cost using the highhow method? 2 if the forecasted level of activity for an upcoming month is 1,950 machine hours what is the forecasted monthly repair and maintenance cost? 3. Identify three different methods that can be used to create a cost estimation formula identifying a pro or con for using each of the three. One poor or con for each of the three that you identify
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