Jasmine Day, the management accountant at Bluedock Pty Ltd, has been analysing the relationship between truck...

1.   

Transcribed Image Text:

Jasmine Day, the management accountant at Bluedock Pty Ltd, has been analysing the relationship between truck maintenance costs and kilometres travelled for the period between January to December. She has collected the following information: Month Maintenance Kilometres Cost (S) 103,500 94,530 82,500 111,000 89,000 78,000 107,000 81,000 104,500 83,500 90,000 113,500 January February March April May June July August September October November December (Km) 33,210 31,000 27,050 39,000 30,110 26,500 36,200 24,000 35,000 29,050 32,000 36,000 Jasmine also ran a regression using the above data. The output of this regression is below: T Hide m Jasmine also ran a regression using the above data. The output of this regression is below Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations Intercept Km ... 0.94306 0.88936 0.87830 4386.47033 12.00000 Coefficients 11657.85072 2.63277 P-value 9363.18759 1.24507 0.24149 0.29364 8.96588 0.00000 Standard Error t Stat Note: Please calculate to 2 decimal places where appropriate. a) Use the low method to determine the company cost function for truck maintenance cost and use this function to predict the truck maintenance cost that would be incurred when 34,000 kilometres are driven. b) Use the regression output to determine the company cost function for truck maintenance cost and use this function to predict the truck maintenance cost that would be incurred when 34,000 km and driven. c) Discuss in detail the difference the high low method and regression. explain in detail which one of the two cost functions (obtain a and b) is likey to be more accurate d) Explain 2 potential data collection issues Jasmine Day, the management accountant at Bluedock Pty Ltd, has been analysing the relationship between truck maintenance costs and kilometres travelled for the period between January to December. She has collected the following information: Month Maintenance Kilometres Cost (S) 103,500 94,530 82,500 111,000 89,000 78,000 107,000 81,000 104,500 83,500 90,000 113,500 January February March April May June July August September October November December (Km) 33,210 31,000 27,050 39,000 30,110 26,500 36,200 24,000 35,000 29,050 32,000 36,000 Jasmine also ran a regression using the above data. The output of this regression is below: T Hide m Jasmine also ran a regression using the above data. The output of this regression is below Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations Intercept Km ... 0.94306 0.88936 0.87830 4386.47033 12.00000 Coefficients 11657.85072 2.63277 P-value 9363.18759 1.24507 0.24149 0.29364 8.96588 0.00000 Standard Error t Stat Note: Please calculate to 2 decimal places where appropriate. a) Use the low method to determine the company cost function for truck maintenance cost and use this function to predict the truck maintenance cost that would be incurred when 34,000 kilometres are driven. b) Use the regression output to determine the company cost function for truck maintenance cost and use this function to predict the truck maintenance cost that would be incurred when 34,000 km and driven. c) Discuss in detail the difference the high low method and regression. explain in detail which one of the two cost functions (obtain a and b) is likey to be more accurate d) Explain 2 potential data collection issues

Answer rating: 100% (QA)

a Using highlow method we can calculate the maintenance cost as Variable Cost HAUsLowest Activity UnitsHACLowest Activity Cost where HACHighest activi... View the full answer