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Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow. Month 1 2 3 4 5 6 7 8 9 10 11 12 Maintenance Costs $ 2,649 2,794 2,344 2,944 2,979 3,010 2,989 3,029 2,904 2,694 2,714 3,014 Machine Hours 1,511 1,602 1,612 1,667 1,787 1,892 1,797 1,817 1,707 1,422 1,562 1,437 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollor.) Maintenance cost MACHINE HOURS 3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your fine answer as a percentage rounded to 1 decimal place (i.e...054 = 5.4%).) Meen absolute percentage error (MAPE) %
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