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The Hard Rock Mining Company is developing cost formulas for management planning and decision - making purposes. The company s cost analyst has concluded that
The Hard Rock Mining Company is developing cost formulas for management planning and decisionmaking purposes. The companys 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 laborhours would be a better base. The cost analyst has decided to try both bases and has assembled the following information:
Quarter Tons Mined Direct LaborHours Utilities Cost
Year :
First $
Second $
Third $
Fourth $
Year :
First $
Second $
Third $
Fourth $
Problem A Part Algo
Required:
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:
On the graph below, use the point tool Year st quarter to plot tons mined on the horizontal axis and utilities cost on the Vertical axis.
Repeat the same process for the plotter tools Year nd quarter to Year th quarter
To enter exact coordinates, click on the point and enter the values of x and y
To remove a point from the graph, click on the point and select delete option.
b Using the leastsquares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost per quarter. Express these estimates in the form Y a bXRound the Variable cost per unit to decimal places and Fixed Cost to the nearest whole dollar amount.
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