Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
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 Tom Mined Hours Cost Year 13 First 30,00 6,500 5.65,000 Second 19,000 4,500 $ 60,000 Third 35,000 5,500 $ 25,000 Fourth 27,000 7.500 $ 90,000 Year 2 First 33,000 13,000 5115,000 Second 40,000 13,500 $120,000 Third 45,000 11,000 $100,000 Fourth 14,000 $135,000 Required: 1. Using the least squares regression method estimate the variable litis cost per ton mined and the total fixed utilities cost per quarter Express these estimates in the form Ya+bx (Round the Variable cost per unit to 2 decimal places and Fixed Cost to the nearest whole dollar amount) $ 22.000 $ 171 12 3 $ 4 3 % 5 LO 7 00 I w W E R T Y C ! 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 Cost Quarter Year 1 First Second Third Fourth Year 21 First Second Third Fourth Tons ined 30,000 19,000 35.000 27,690 5,500 7.500 $ 65,000 $ 60,000 $ 75,000 $ 90,000 33,000 40.000 45,000 13,000 13,500 11,000 14.000 $115,000 $120,000 $100,000 $135,000 2 Using the least squares regression method, estimate the variable utilities cost per direct labor hour and the total foed utilities 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.) Answer is not complete. 32.902

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 1

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel

8th Edition

1260881237, 9781260881233

More Books

Students also viewed these Accounting questions