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Section 2: Cost estimation and prediction 18 marks Part I 53' ram-Ra Sentinels Ltd assembles and exports sensors. The following information is available for the

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Section 2: Cost estimation and prediction 18 marks Part I 53' ram-Ra Sentinels Ltd assembles and exports sensors. The following information is available for the month: It'lontbly depreciation on factory building and equipment totals $3U. Invoices 'om suppliers show the plastic= magnets and circuit boards used in producing sensors cost, on average, 813.10 per unit. 'Wage records show that wages and oncosts for production employees average $.2 per sensor. Fixed daily charges for electricity totals $3, per month and usage costs average $U5 per sensor. Payroll records show engineers' and factory supervisorsr salaries total SHJUD per month. Machines are maintained two times each month. The cost per round of maintenance is 86,300. Sales commission paid to salespersons average $6,0 per month. Required: 1. Use the accountclassication method to express the cost function for estimating total monthly production cost. (7" marks) . Predict the production cost for next month, assuming that sensors will be manufactured. (2 marks) Part 2 .0 moat-3:3 Clementine operates self serviced apartments and would like a cost formula linking total costs to occupancy days. The total costs and occupancy days for the past 12 months are as follows: Tmmusts July T16 65:600 56:90'3' September 6 8:400 - m cm June The relevant range of monthly occupancyr capacity is 413"!) to 1,1320 days. Required: 1. Use the high-low method to express the cost luetion for total costs. The cost function needs to he able to reasonably predict future monthly costs for Clementine. (3" marks] hJ _ Explain whether you will use this cost inction to predict the total costs for 300 occupancy days. (2 marks)

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