1. For the past 2 years, Teagan has worked in a machining facility, helping the company...

Transcribed Image Text:

1. For the past 2 years, Teagan has worked in a machining facility, helping the company track and record its wide variety of costs. She has organized the data quarterly, to correspond with the quarterly budget/ actual meetings, with the following data obtained for power costs. Power costs used to be a mystery to the company before the new production supervisor came on bard, just 6 months after Teagan started. Teagan heard through the grapevine that employees and management in the factory used to leave equipment running even when there was not an active production run in process. In other cases, they shut everything down right in the middle of a shift to celebrate employee milestones with cake. There are no such activities now, as the new supervisor is running a tight ship. Machine Power Cost Required (Round to 3 decimal places if necessary): a. Using the below scatter plot of the data in Excel. Does the data exhibit a linear relationship within this range of activity? What is the expected production range given this data for the past 10 quarters? Quarter Hours 1 28,000 36,400 2 35,000 53,200 3 42,000 59,500 4 30,800 51,800 Power cost 5 29,400 47,600 $70,000 $60,000 6 25,200 40,600 $50,000 $40,000 7 33,600 50,400 $30,000 8 39,200 53,400 $20,000 $10,000 9 37,000 52,000 50 0 10,000 20,000 30,000 40,000 50,000 10 34,500 48,500 b. Using the high-low method, calculate the variable and fixed components of the power cots. ii. Draw the high-low cost line into the scatter plot Write out the full cost function in Y=m(x) + b format. 1. For the past 2 years, Teagan has worked in a machining facility, helping the company track and record its wide variety of costs. She has organized the data quarterly, to correspond with the quarterly budget/ actual meetings, with the following data obtained for power costs. Power costs used to be a mystery to the company before the new production supervisor came on bard, just 6 months after Teagan started. Teagan heard through the grapevine that employees and management in the factory used to leave equipment running even when there was not an active production run in process. In other cases, they shut everything down right in the middle of a shift to celebrate employee milestones with cake. There are no such activities now, as the new supervisor is running a tight ship. Machine Power Cost Required (Round to 3 decimal places if necessary): a. Using the below scatter plot of the data in Excel. Does the data exhibit a linear relationship within this range of activity? What is the expected production range given this data for the past 10 quarters? Quarter Hours 1 28,000 36,400 2 35,000 53,200 3 42,000 59,500 4 30,800 51,800 Power cost 5 29,400 47,600 $70,000 $60,000 6 25,200 40,600 $50,000 $40,000 7 33,600 50,400 $30,000 8 39,200 53,400 $20,000 $10,000 9 37,000 52,000 50 0 10,000 20,000 30,000 40,000 50,000 10 34,500 48,500 b. Using the high-low method, calculate the variable and fixed components of the power cots. ii. Draw the high-low cost line into the scatter plot Write out the full cost function in Y=m(x) + b format.

Answer rating: 100% (QA)

Answer a To determine if the data exhibits a linear relationship we can use a scatter plot in Excel ... View the full answer