How do you develop an equation from average costs?

Example: Paradise Pub is a high-end dog hotel located in New York. Assume that in March, when dog-days occupancy was at an annual low of 500 days, the average cost per dog-day was $26. In July, when dog-days were at a capacity level of 4,500, the average cost per dog-day was $10.

If I want to develop an equation for monthly operating costs and I let X = dogs-days per month, how would I compute this?

Total cost = $___ + $ ___ * X

How would I determine the average cost per dog-day at an annual volume of 28,000 dog-days?

Multiple Cost Drivers

Lettuce Serve manufactures a variety ofspecialty salad dressings. Production runs are both high-volume and low-volume activities, depending on customer orders. Presented is Lettuce Serve's 2017 general manufacturing costs (manufacturing overhead) and each cost's related activity cost driver.

Level Total Cost Units ofCost Driver

Unit$ 500,000 10,000 machine hours

Batch50,000 500 customer orders

Product 100,000 25 products

Their cranberry vinaigrette dressing required 3,000 machine hours to fill 10 customer orders for a total of 8,000 units.

Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours,how would I determinethe predicted total overhead costs to produce the 8,000 units of cranberry vinaigrette?

Assuming manufacturing overhead is estimated and predicted using separate rates for machine hours, customer orders, and products (a multiple-level cost hierarchy), how would I determine the predicted total overhead costs to produce the 8,000 units of cranberry vinaigrette?

How would I calculate the error in predicting manufacturing overhead using machine hours versus using multiple cost drivers?

How would I calculate the error in the prediction of cranberry vinaigrette batch-level costs resulting from the use of only machine hours?

How would I calculatethe error in the prediction of cranberry vinaigretteproduct-level costs resulting from the use of only machine hours?Indicate whether the use of only machine hours results in overpredicting or underpredicting the product-level costs of cranberry vinaigrette.?

Unit- and Batch-Level Cost Drivers

Example: KC, a fast-food restaurant, serves fried chicken, fried fish, and french fries. The managers have estimated the costs of a batch of fried chicken for KC's all-you-can-eat Friday Fried Fiesta. Each batch must be 50 pieces. The chicken is precut by the chain headquarters and sent to the stores in 10-piece bags. Each bag costs $4. Preparing a batch of50 pieces of chicken with KC's special coating takes one employee two hours. The current wage rate is $9 per hour. Another cost driver is the cost of putting fresh oil into the fryers. New oil, costing $6.50, is used for each batch.

Howwould I figure out thecost of preparing one batch of 50 pieces?

If management projects that it will sell 150 pieces of fried chicken,how would I determinethe total batch AND unit costs?

If management estimates the sales to be 350 pieces,how would I figure outthe total costs?

How can I figure out how much the batch costs increase if the government raises the minimum wage to $10 per hour?

If management decided to increase the number of pieces in a batch to 100,how do Ifigure outthe cost of preparing 350 pieces? Lets assume that the batch would take twice as long to prepare, and management wants to replace the oil after 100 pieces are cooked.