Inbee estimates that Hankuk has a variable cost of $17.50 per direct labor-hour. She expects that Hankuk will produce 650 units in the next month, January 20X2. What should she budget as the expected variable cost? How confident is she of her estimate?

Hankuk Electronics started production on a sophisticated new smartphone running the Android operating system in January 20X1. Given the razor-thin margins in the consumer electronics industry, Hankuk's success depends heavily on being able to produce the phone as economically as possible. At the end of the first year of production, Hankuk's controller, Inbee Kim, gathered data on its monthly levels of output, as well as monthly consumption of direct labor-hours (DLH). Inbee views labor-hours as the key driver of Hankuk's direct and overhead costs. The information collected hy Inhee is nrovided helow