Question
Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2018. The following cost and other
Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for
2018. The following cost and other data were gathered for 2017:
DATA TABLE :
Month Maintenance Costs Machine Hours Health Insurance Number of Employees Shipping Costs Units Shipped
January | $4,450 | 158 . | $8,560 | 58 | $22,784 | 7,120 |
February | $4,375 | 125 | $8,560 | 79 | $26,272 | 8,210 |
March | $4,675 | 233 | $8,560 | 91 | $25,440 | 7,950 |
April | $4,880 | 315 | $8,560 | 108 | $20,576 | 6,430 |
May | $5,140 | 463 | $8,560 | 90 | $19,008 | 5,940 |
June | $4,715 | 277 | $8,560 | 84 | $29,696 | 9,280 |
July | $4,947 | 335 | $8,560 | 94 | $27,776 | 8,680 |
August | $4,941 | 357 | $8,560 | 86 | $26,816 | 8,380 |
September | $5,022 | 419 | $8,560 | 92 | $21,568 | 6,740 |
October | $5,226 | 483 | $8,560 | 110 | $22,944 | 7,170 |
November | $5,244 | 520 | $8,560 | 95 | $17,952 | 5,610 |
December | $4,735 | 277 | $8,560 | 95 | $30,688 | 9,590 |
Cost | ||
Cost | function | Explanation |
Maintenance | Mixed | The cost neither remains constant in total nor remains constant per unit. |
Health insurance | Fixed | Although the cost driver varies from month to month, the total cost remains constant. |
Shipping costs | Variable | The cost per unit remains constant each month. |
Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain.
Requirement 2. Using the high-low method, determine the cost function for each cost.
Begin by selecting the general formula that represents the linear cost function for each cost.
Maintenance | y = a + bX |
Health insurance | y = a |
Shipping costs | y = bX |
Now determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If a box is not used in the equation, leave the box empty; do not enter a zero or select a label.)
Cost function | |||||
Maintenance | 1)y = ______ | 2)_____ | + | per machine hour | |
Health insurance | 3)y =______ | + | per employee | ||
Shipping costs | y = | 4)______ | + | per unit shipped |
2. Using the high-low method, determine the cost function for each cost.1. Which of the preceding costs is variable? Fixed? Mixed? Explain.
3. Combine the preceding information to get a monthly operating cost function for the Silk Corporation.
4.Next month, Silk expects to use 470 machine hours, have 140 employees, and ship 8,900 units. Estimate the total operating cost for the month.
5. This question is continued, Can you help me with the rest. Requirement 3. Combine the preceding information to get a monthly operating cost function for the Silk Corporation. Monthly operating = 1)______ + 2) ______ 3)________ + 4)_______ 5)________ 3) & 4) are a multiple choice. These are the options : per employee, or per machine hours or per units shipped.
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