Question 2.2

The following data relate to the overhead expenditure of a contractor who undertakes industrial repairs and maintenance for the first six months in 2022

Month Maintenance cost Maintenance hours

Jan 630 7950

Feb 500 7400

Mar 700 8280

April 550 7630

May 780 9100

Jun 800 9800

Where there are more than 1 000 hours incurred in maintenance, it is necessary for the business to employ an additional supervisor at any site at an extra fixed cost of N$ 5 575. REQUIRED:

2.2.1 Using least squares approach determine the cost function for the maintenance cost. xy = ax + bx (i) y = na + bx.(ii) Note: You are not obliged to use the simultaneous equation approach. Any other approach is acceptable. 11 2.2.2 Using your answer to 2.2.1 calculate the total cost at 1 200 Maintenance hours. 2 2.2.3 Using the high-low method, determine the cost function for the maintenance cost.