A plastic product is manufactured by SLT Company. For total costs, the company estimates the cost function.
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Question:
A plastic product is manufactured by SLT Company. For total costs, the company estimates the cost function. The number of units is the cost driver. The following details were gathered:
Month | Units | Total Cost (SAR) |
March | 4,370 | 44,300 |
April | 4,680 | 44,600 |
May | 5,000 | 45,000 |
June | 5,300 | 45,400 |
July | 5,600 | 47,500 |
August | 5,900 | 57,500 |
September | 3,400 | 40,000 |
October | 4,100 | 40,625 |
Use the high-low analysis method and answer the following:
- Calculate Variable Costs and fixed costs.
- Determine the cost function.
Related Book For
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
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