vouwvallHU Valley RUSLPRODUITS 4. Smith Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2018. The following cost and other data were gathered for 2017: (Click the icon to view the cost and other data) Read the requirements Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain Cost Cost function Explanation Maintenance (1) (2) Health insurance (3) (4) Shipping costs (5) (6) Requirement 2. Using the high-low method, determine the cost function for each cost. Begin by selecting the general formula that represents the linear cost function for each cost. Maintenance (7) Health insurance (8) Shipping costs (9) Now determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If a box is not used in the equation, leave the box empty, do not enter a zero or select a label.) Cost function Maintenance y= (10) Health insurance y = Shipping costs y = (12) Requirement 3. Combine the preceding information to get a monthly operating cost function for the Smith Corporation Monthly operating cost - D O (13) O (14) Requirement 4. Next month, Smith expects to use 470 machine hours, have 70 employees, and ship 9,100 units. Estimate the total operating cost for the month. Monthly operating cost s 1: Data Table Machine Hours Number of Employees 183 Maintenance Costs 4,530 4,505 4.635 4,860 5,195 4710 4,951 Month January February March Apri May June July August September October November December 313 288 Health Insurance 8,590 8.500 8.500 8.500 8.590 8,590 8,500 8,590 8.500 8.590 8.590 8,590 Shipping Units Costs Shipped 24 446 7190 28,152 8.280 27.054 7.960 21,998 6,470 20,026 5,890 31 454 9200 29,5128,680 28,504 8,410 23.052 6,780 24,344 7.160 5 18.768 5.520 32,742 9,630 355 417 480 110 5.025 5,233 5,636 4782 103 560 2755 2: Requirements 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. 2. Using the high-low method, determine the cost function for each cost 3. Combine the preceding information to get a monthly operating cost function for the Smith Corporation 4. Next month, Smith expects to use 470 machine hours, have 70 employees, and ship 9,100 units Estimate the total operating cost for the month. (1) O O Fixed O Mixed Variable (2) O Although the cost driver varies from month to month, the total cost remains constant Although the total cost varies from month to month, the cost driver remains constant The cost neither remains constant in total nor remains constant per unit. The cost per unit remains constant each month. (3) O Fored Mibed O Variable (4) O O Although the cost driver varies from month to month, the total cost remains constant. Although the total cost varies from month to month, the cost driver remains constant. The cost neither remains constant in total nor remains constant per unit. The cost per unit remains constant each month. 0000 O Foxed Mixed O Variable (6) O Although the cost driver varies from month to month, the total cost remains constant. O Although the total cost varies from month to month, the cost driver remains constant. O The cost neither remains constant in total nor remains constant per unit. The cost per unit remains constant each month. (7) O yra O y = a + bx Oy=bx (8) O Oya Oy= a + bx O y = bx (9) O Oy=a O y = a + bx O y = bx (10) O O per employee O per machine hour O per unit shipped (13) (11) O O per employee O per machine hour O per unit shipped (12) O O per employee O per machine hour O per unit shipped O per employee O per machine hour O per unit shipped (14) O O per employee O per machine hour O per unit shipped