Question: Donna Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for the last five

Donna Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for the last five months of operations:

Labor Hours Maintenance Cost

January 190 P677

February 120 P593

March 170 P646

April 110 P623

May 100 P582

Required:

[a] Using the high-low method of analysis, how much is the estimated variable cost per labor hour for maintenance?

[b] Using the high-low method of analysis, how much is the estimated total fixed cost per month?

[c] Using high-low, compute for the expected maintenance cost for June if expected labor hours is 150 hours.

[d] Using the least-squares regression method, how much is the estimated variable cost per labor hour for maintenance?

[e] Using the least-squares regression method, how much is the estimated total fixed cost per month for maintenance?

[f] Using the least-squares regression method, compute for the expected maintenance cost for June if expected labor hours is 150 hours.

[g] Using the least-squares regression equation, where is the total maintenance cost for March located with respect to the regression line?

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