Westminster Company has had the following experience over the past five quarters: Units producedElectricity cost ($) 27,000
Question:
Westminster Company has had the following experience over the past five quarters:
Units producedElectricity cost ($)
27,000 ................................$101,000
32,000 ................................$120,000
31,000 ................................$116,000
20,000 ..................................$84,000
22,000..................................$90,000
Using the high-low method, determine an equation for electricity cost (Y) as a function of units produced (X). Assume a linear function. Using your equation, forecast electricity cost at a volume of 25,000 units produced.
a) Using the high-low method, determine an equation for electricity cost (Y) as a function of units produced (X). Assume a linear function.
b) Using your equation, forecast electricity cost at a volume of 25,000 units produced.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones