Cost Estimation-High and Low (Requirements 2 and 3 only)

P335 Cost estimation; highlow: regression: wholesaler PipeDream Supplies is a wholesaler of a large variety of pipes and other plumbing needs. The company's L033 accountant, Bobbi Esbend. has recently completed a cost study of the rm's shipping department in which she used the weight of supplies loaded or unloaded at the compa ny"s loading dock to quantify the department's activity. Bobbi compiled the following data. Month Supplies loaded or unloaded (kg) Shipping department oasis January 5 400 $35 100 February 4 300 33 900 March 3 900 33 1'50 April 3 000 30 600 May 6 600 33 300 June 3 200 31' 650 July 6 000 36000 August 5 400 34 21]} September 3' 300 36 360 October 3 300 33 150 November 3 600 34050 December 4 200 34 050 Required: 1. Draw a scatter diagram of the cost data for the shipping department. 2. Estimate the shipping department's cost behaviour using the highlow method. Use an equation to express the results of this estimation method. 3. Using the equation estimated in requirement 2, predict the shipping department's costs for a month when loads totalling 4 500 kilograms are moved. P5.34 Weighted average process costing: manufacturer LO5.2 Triangle Zipper Company accumulates costs for its single product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process. A partially completed production report for May follows. Production report, May Percentage of Equivalent units Physical completion with respect Direct units to conversion materials Conversion Work in process, 1 May 25 000 40% Units started during May 30 000 55 000 Units completed and transferred out during May 35 000 35 000 35 000 Work in process, 31 May 20 000 80% 20 000 16 000 Total units accounted for 55 000 Direct material Conversion Total Work in process, 1 May $143 000 $ 474 700 $ 617 700 Costs incurred during May 165 000 2009 000 2174 000 Total costs to account for $308 000 $2483 700 $2 791 700 Required: 1. Complete the following process costing steps using the weighted average method: (a) calculation of equivalent units (b) calculation of unit costs (c) analysis of total costs