Gin Company has the following data for the past six months for the mixed cost, cleaning...
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Gin Company has the following data for the past six months for the mixed cost, cleaning costs, incurred: Month Cleaning Cost Units produced January 19,500 February 19,200 March 21,200 April 43,000 May 29,200 June 42,400 Required: i) ii) $48,048 48,246 50,980 106,080 70,800 94,254 Assume Gin Company uses high-low method to analyze cleaning costs, find the cost function for Gin Company. (13 marks) Gin Company has conducted regression analysis. The R2 are 0.55 and 0.85 for the cost driver "units produced" and "labor hours" respectively. Which cost driver is more appropriate for cost estimation? Explain. (4 marks) Gin Company has the following data for the past six months for the mixed cost, cleaning costs, incurred: Month Cleaning Cost Units produced January 19,500 February 19,200 March 21,200 April 43,000 May 29,200 June 42,400 Required: i) ii) $48,048 48,246 50,980 106,080 70,800 94,254 Assume Gin Company uses high-low method to analyze cleaning costs, find the cost function for Gin Company. (13 marks) Gin Company has conducted regression analysis. The R2 are 0.55 and 0.85 for the cost driver "units produced" and "labor hours" respectively. Which cost driver is more appropriate for cost estimation? Explain. (4 marks)
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Answer i Variable Cost per unit Highest activity cost Lowest activity cost Highest activity units L... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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