Required information The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Direct Labor. Utilities Hours Cost Tons Mined Quarter Year 1: First Second Third Fourth Year 2: First Second Third Fourth 23,000 16,000 28,000 20,000 5,800 3,800 4,800 6,809 $ 58,000 $ 53,000 $ 68,000 $ 83,000 26,000 33,000 38,000 36,000 10,800 9,800 8,800 11,800 $108,000 $113,000 $ 93,000 $128,000 2. Using direct labor hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis. Instructions: 1. On the graph below, use the point tool (Year 1-1ot quarter) to plot direct laborehours on the horizontal axis and utilities coston the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2.4th quarter). TAR 2-a. Using direct labor hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis. Instructions: 1. On the graph below, use the point tool (Year 1-1st quarter) to plot direct labor-hours on the horizontal axis and utilities cost on the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2-4th quarter). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. Your Graph Score: 0% $140.000 $120.000 $100.000 os 8500.000 Required information $20,000 30 0 2.000 4.000 0.000 8.000 10.000 12.000 14.000 Direct Labor-Hours 2-b. Using the least-squares regression method, estimate the variable utilities cost per direct labor-hour and the total fixed utilities cost per quarter . Express these estimates in the form Y = 0 +bX (Round the Variable cost to 2 decimal places and Fixed Cost to the nearest whole dollar amount.) Answer is complete but not entirely correct. Y- 18,926 251 X X Required information The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Direct Labor- Utilities Quarter Tons Mined Hours Cost Year 1: First Second Third Fourth Year 2: First Second Third Fourth 23,000 16,000 28,880 20,000 5,800 3,800 4,800 6,800 $ 58,000 $ 53,000 $ 68,000 $ 83,000 26,000 33,000 38,000 36,000 10,880 9,800 8,800 11,800 $108,000 $113,000 $ 93,000 $128,000 Required: 1-a. Using tons mined as the independent variable, prepare a scattergraph that plots tons mined on the horizontal axis and utilities cost on the vertical axis. Instructions: Required: 1-a. Using tons mined as the independent variable, prepare a scattergraph that plots tons mined on the horizontal axis and utilities cost on the vertical axis Instructions: 1. On the graph below, use the point tool (Year 1-1st quarter) to plot tons mined on the horizontal axis and utilities cost on the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2.4th quarter). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. Utilities Cost 140000 Tools 120000 . Year 1. Isto 100000 . 80000 Year 1 - 2nd 60000 . 40000 Yeart de RICU NS 18! Next Utilities Cost 140000 Ye Tools at a 120000 700000 Year 2-2nd a 80000 S Year 2 - 3rd 60000 40000 Year 2 - 4th ou 20000 10000 30000 20000 40000 50000 60000 Tons Mined Year 1 - 1st quarter $140,000 Year 1 - 2nd quarter $120,000 $100.000 Year 1 - 3rd quarter 850,000 Utilities Cost Year 14th quarter 580.000 340.000 Year 2.1 Quarter 520.000 You 2 - 2nd Quan 50 2.000 4,000 0.000 0.000 10.000 12.000 14.000 Year 23rd Quarter Direct Labor-Hours Year 2 - 2nd quarter 50 0 2.000 4.000 8.000 8.000 10.000 12.000 14.000 Year 2-3rd Direct Labor-Hours quarter reset 2-b. Using the least squares regression method. estimate the variable utilities cost per direct labor hour and the total fixed utilities cost per quarter Express these estimates in the form Y = a - bx (Round the Variable cost to 2 decimal places and Fixed Cost to the nearest whole dollar amount.) Y= $ 18,926 - $ 2.51
