(This is the work I have so far, Just need more explanation for #2 and #4)

Linda joined Galway Company, a toy manufacturer, one month ago and has not learned much about cost accounting. In spite of lacking for experience in this area, her boss Ron has urged her to start a budgeting project due to a shortage of staff in house. Ron wants to know how much total delivery costs would be incurred next month with an expectation of 2,000 toys sold and delivered, an unprecedented number in Galways history, but still within its relevant range. Ron has not told Linda much information and what to do about this project but has only given the following numbers related to the delivery units and costs incurred in the past 12 months. Linda asks you to help her complete the assigned work.

Month	Units delivered	Delivery cost	Month	Units delivered	Delivery cost
1	800	$20,000	7	1,250	$26,000
2	1,000	21,000	8	1,400	30,000
3	900	19,500	9	1,300	24,000
4	1,200	22,500	10	1,500	33,500
5	1,400	29,500	11	1,700	36,000
6	1,100	21,500	12	1,600	34,000

Instructions:

1. Explain the work that Linda has been assigned in your own words. Then develop a step-by-step plan to achieve the goal.
   1. Linda was assigned to look at previous data from deliveries at Galway Company and give an estimate as to how much it would cost to deliver 2,000 units of toys. To gather all the information, she will need Linda will need to calculate the cost in three costing techniques. These costing techniques are the weighted average method, the last nearest cost method, and the cost per unit method
2. Use alternative methods to determine the expected delivery cost with 2,000 units delivered (show calculations for each method).
   1. First we must determine the cost per unit the past month to gather needed information: (Rounded to the nearest dollar)

Month	Weighted Average	Cost Per Unit	Month	Weighted Average	Cost Per Unit
1	$16,000,000	$25	7	$32,500,000	$21
2	$21,000,000	$21	8	$42,000,000	$21
3	$17,550,000	$22	9	$31,200,000	$18
4	$27,000,000	$19	10	$50,250,000	$22
5	$41,300,000	$21	11	$61,200,000	$21
6	$23,650,000	$20	12	$54,400,000	$21

For the past 12 months:

• Total Units Delivered = 15,150
• Total Weighted Average = $418,050,000
• Total Cost Per Unit = $252

Weighted Average Method	Last Nearest Cost Method	Cost Per Unit Method
418,050,000/15,150= 27594		-252/12=21 -21x2000 = 42,000 Using this method it would cost $42,000 to deliver 2,000 units

3. Discuss the advantages and disadvantages of the alternative methods in question 2.
4. Assume that the delivery cost in Month 4 is $30,000 instead of $22,500, and everything else is the same. The significantly high cost of $30,000 in Month 4 was caused by an incident that is not expected to recur in the future. Complete the following:
   1. Discuss how you are going to deal with the data of Month 4.
   2. Redevelop the regression model and determine the expected delivery costs with 2,000 units delivered.
   3. Discuss the differences on the results between this new regression model and the previous model used in the scenario where the delivery cost in Month 4 is $22,500.