Case study 1 The management accounting division of Solar Limited wants to estimate the company's monthly...

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Case study 1 The management accounting division of Solar Limited wants to estimate the company's monthly operating costs for the next 6 months. The following cost and other data were gathered for the previous 12 months: Maintenance Machine Month cost hours Health insurance No. of employees Shipping costs Units shipped February $ 4,500 165 $ 8,600 68 $26,492 7,160 March $ 4,452 120 $ 8,600 75 $ 30,488 8,240 April $ 4,600 230 $ 8,600 92 $29,471 7,965 May $ 4,850 318 $ 8,600 105 $ 23,699 6,405 June $ 5,166 460 $ 8,600 89 $ 21,886 5,915 July $ 4,760 280 $ 8,600 87 $ 34,207 9,245 August $ 4,910 340 $ 8,600 93 $ 32,301 8,730 September $ 4,960 360 $ 8,600 88 $ 31,136 8,415 October $ 5,070 420 $ 8,600 95 $ 25,808 6,975 November $ December $ 5,271 January 5,250 495 $ 8,600 102 $ 26,585 7,185 510 $ 8,600 97 $ 20,683 5,590 $ 4,760 275 $ 8,600 94 $ 35,557 9,610 The maintenance cost is a mixed cost because the cost neither remains constant in total nor remains constant per unit. The health insurance cost is fixed per month because, although the number of employees change from month to month, the total cost remained constant. The shipping cost varies with the number of units shipped. Solar Ltd received a notification from its health insurance company in January. The notice from the insurance company advised that the insurance that the monthly health insurance premium will be increased by 2% commencing April 2021. Solar Ltd also received a notification from its shipping company in December. The notice from the shipping company advised that the shipping charges per shipment would increase by 3.13% from May 2021. Case study 1 The management accounting division of Solar Limited wants to estimate the company's monthly operating costs for the next 6 months. The following cost and other data were gathered for the previous 12 months: Maintenance Machine Month cost hours Health insurance No. of employees Shipping costs Units shipped February $ 4,500 165 $ 8,600 68 $26,492 7,160 March $ 4,452 120 $ 8,600 75 $ 30,488 8,240 April $ 4,600 230 $ 8,600 92 $29,471 7,965 May $ 4,850 318 $ 8,600 105 $ 23,699 6,405 June $ 5,166 460 $ 8,600 89 $ 21,886 5,915 July $ 4,760 280 $ 8,600 87 $ 34,207 9,245 August $ 4,910 340 $ 8,600 93 $ 32,301 8,730 September $ 4,960 360 $ 8,600 88 $ 31,136 8,415 October $ 5,070 420 $ 8,600 95 $ 25,808 6,975 November $ December $ 5,271 January 5,250 495 $ 8,600 102 $ 26,585 7,185 510 $ 8,600 97 $ 20,683 5,590 $ 4,760 275 $ 8,600 94 $ 35,557 9,610 The maintenance cost is a mixed cost because the cost neither remains constant in total nor remains constant per unit. The health insurance cost is fixed per month because, although the number of employees change from month to month, the total cost remained constant. The shipping cost varies with the number of units shipped. Solar Ltd received a notification from its health insurance company in January. The notice from the insurance company advised that the insurance that the monthly health insurance premium will be increased by 2% commencing April 2021. Solar Ltd also received a notification from its shipping company in December. The notice from the shipping company advised that the shipping charges per shipment would increase by 3.13% from May 2021.