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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 the maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in establishing future maintenance costs to better predict the firms possibility. Together, you have determined that the best cost driver for maintenance cost is machine hours. The data from the previous fiscal year for maintanance costs and machinery hours follow:
1. Use the high-low method to estimate the fixed and variable portions for maintanance costs
2. Graph the data points to check for possible outliers and determine whether the points selected in requirement 1 are representative of the data. (Click each month and then click the graph to bring up the data coordinates. Enter the exact coordinates for each month.) MAINTENANCE COSTS $3,100 $3,000 $2,900 $2,800 $2,700 $2,600 $2,500 0 500 1000 20 MACHINE HOURS Mean absolute percentage error (MAPE) 012 1500 H 2000 Tools 9th Month % 10th Month 11th Month 3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final nswer as a percentage rounded to 1 decimal place (i.e., .054 = 5.4%).) 12th Month
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