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The Lamesa Corporation builds tabletop replicas of some of the most famous resorts in the Philippines. The company is highly automated, and thus maintenance
The Lamesa Corporation builds tabletop replicas of some of the most famous resorts in the Philippines. The company is highly automated, and thus maintenance cost is a significant organizational expense. The company's owner has decided to use machine hours as a basis of predicting maintenance costs and has gathered the following data from the prior 8 weeks of operations: Required: Numbe r of MH 3,000 4,500 8,000 6,000 13,500 Maintenance Costs a. Variable cost rate Quarter S 9,800 12,900 01 18,100 02 03 b. Total fixed costs c. If the company expects to use 8.200 machines hours next month, how much us the estimated maintenance costs. Units Produced 2. One of the products of La Union Corporation goes through a glazing process. For the last six quarters, the cost of the glazing process was observed in relation with the number of units produced as tabulated below: 00 00 00 8 5 1,0 Total Cost 27,0 00 20,0 00 Numbe r of MH 31,0 9,000 00 Maintenance Costs 3,500 24,800 10,400 5,500 13,000 7,000 16,000 Quarters 04 05 06 Units Produce d 0 0 0 40 60 90 Total Cost 19,0 00 24,0 00 29,0 00 Required: a. b. Express the cost data in "a" above in the form Y=a + bx c. Assume the company processes 1,120 units in the next quarter, how much is the expected glazing cost? Using the least-squares method, calculate the variable cost rate and the total fixed costs elements of the glazing process
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