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Please help me with a management accounting question. Thanks a lot Question 3 - Cost Behaviour Susan Supplies Ltd is a wholesaler for a large
Please help me with a management accounting question.
Thanks a lot
Question 3 - Cost Behaviour Susan Supplies Ltd is a wholesaler for a large variety of plumbing supplies. The company's accountant, Moriss, has recently completed a cost study of the firm's Shipping Department in which he used the kilograms of supplies loaded or unloaded at the company's loading dock to quantify the department's activity. Susan supplies compiled the following data. Required: A. Draw a scatter diagram of the cost data for the Shipping Department. B. Estimate the Shipping Department's cost behaviour using the high-low method. Use an equation to express the results of this estimation method. C. Using the equations estimated in Part 2 predict the Shipping Department's costs for a month when loads totalling 5500 kilograms are moved. D. Prepare least squares regression analysis to estimate the variable and fixed components for the Shipping Department costs. E. Based on your spreadsheet write the least squares regression equation for the Department's costs. F. Using the equation from Part E, predict the firm's Shipping Department's costs for a month when loads totalling 5500 kilograms are moved. G. Why do these cost predictions estimated using the high-low and regression methods differ? Which method do you recommend? Explain yourStep by Step Solution
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