5 Cuni Culara would like to predict their total monthly overhead cost based on machine hours (MH) used Data for the last 24 months is in the spreadsheet Required 1 Use this data to prepare cost formulas using a) the high low method, and b) regression analysis Show the cost formula from each calculation in the form Overhead Fixed cost MH (Variable OH per unit) Assume that Cuni Culara decides to use the cost formula from the regression analysis Briefly explain in your own words how using this predictive formula might mislead the company over the next year MHOH77 5563 811 83155 8352 742 35574 0113 627 32760 3422 973 51572 3483 538 30052 5192 554 34462 5543 076 07550 4222 478 03267 6073 310 58172 8193 570 21065 3393 189 23351 6832 526 33879 0363 871 99378 4673 829 67052 6482 596 04963 5423 099 98153 1232 609 75357 9042 847 29859 0532 900 80051 5312 525 62175 8623 722 94271 1153 503 17559 3792 889 57451 9712 537 898

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Question: 5. Cuni Culara would like to predict their total monthly overhead cost based on machine hours (MH) used. Data for the last 24 months is

5. Cuni Culara would like to predict their total monthly overhead cost based on machine hours (MH) used. Data for the last 24 months is in the spreadsheet.

Required:

1. Use this data to prepare cost formulas using a) the high-low method, and b) regression analysis. Show the cost formula from each calculation in the form:

Overhead = Fixed cost + MH*(Variable OH per unit)

Assume that Cuni Culara decides to use the cost formula from the regression analysis. Briefly explain in your own words how using this predictive formula might mislead the company over the next year.

MHOH77.5563.811.83155.8352.742.35574.0113.627.32760.3422.973.51572.3483.538.30052.5192.554.34462.5543.076.07550.4222.478.03267.6073.310.58172.8193.570.21065.3393.189.23351.6832.526.33879.0363.871.99378.4673.829.67052.6482.596.04963.5423.099.98153.1232.609.75357.9042.847.29859.0532.900.80051.5312.525.62175.8623.722.94271.1153.503.17559.3792.889.57451.9712.537.898

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