Question
Q1 During the first two months of operations, i.e. January and February 2020, Hamzah Inc. produced 5342 and 8708 units of products respectively. Maintenance costs
Q1 During the first two months of operations, i.e. January and February 2020, Hamzah Inc. produced 5342 and 8708 units of products respectively. Maintenance costs in those two months were $103842, $159328 respectively. The manager, Umar, initially considered maintenance to be a fixed cost, but by the end of the second month of operations, he realized that maintenance cost is probably a mixed cost. He is expecting production and sales to increase to 19472 in the month of March and as such wants a better prediction of maintenance cost. (a) Using the high-low method, the estimated variable maintenance cost per unit is $
(b) Using the high-low method, the estimated total fixed maintenance cost is $
(c) Using the answers from (a) and (b), the best estimate of maintenance cost for the month of March is $
Q2 During the first two months of operations, i.e. January and February 2020, Hamzah Inc. produced 6284 and 9141 units of products respectively. Maintenance costs in those two months were $110952, $173108 respectively. The manager, Umar, initially considered maintenance to be a fixed cost, but by the end of the second month of operations, he realized that maintenance cost is probably a mixed cost. He is expecting production and sales to increase to 16154 in the month of March and as such wants a better prediction of maintenance cost. (a) Using the high-low method, the estimated variable maintenance cost per unit is $
(b) Using the high-low method, the estimated total fixed maintenance cost is $
(c) Using the answers from (a) and (b), the best estimate of maintenance cost for the month of March is $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started