Question: The following data relate to the overhead expenditure of a contractor who undertakes industrial repairs and maintenance for the first six months in 2022 Month

The following data relate to the overhead expenditure of a contractor who undertakes industrial repairs and maintenance for the first six months in 2022

Month Jan Feb Mar April May Jun

Maintenance cost 630 500 700 550 780 800

Maintenance hours 7950 7400 8280 7630 9100 9800

Where there are more than 1 000 hours incurred in maintenance, it is necessary for the business to employ an additional supervisor at any site at an extra fixed cost of N$ 5 575.

REQUIRED:

1 Using least squares approach determine the cost function for the maintenance cost. Ʃxy = aƩx + bƩx² ……………(i) Ʃy = na + bƩx………………….(ii)

Note: You are not obliged to use the simultaneous equation approach. Any other approach is acceptable. (11)

2 Using your answer to 2.2.1 calculate the total cost at 1 200 Maintenance hours. (2)

3 Using the high-low method, determine the cost function for the maintenance cost. (5)

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Answer 1 Using least squares approach determine the cost function for the maintenance cost xy ax bx i y na bxii We have the following equation Maint C... View full answer

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