Evaluating Selected Cost Driver

Assume that a manufacturer of specialized machine parts developed the following total cost$-$estimating equation for manufacturing costs.

$Y=$$$8,800+$$$1,250(actual$ units$)$

a$.$ What is total estimated manufacturing costs if $110$ units are produced?

$

The cost estimating line

$$ an accurate predictor of total manufacturing costs.

c$.$ What is a possible reason for why the company changed its total cost$-$estimating equation to the following?

$Y=$$$8,800+$$$130(labor$ hours$)$

Because the parts are

$,$ the parts may not take the same amount of time to produce.

In a labor intensive operation,