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?

Answer rating: 100% (QA)

Donna Company Maintenance Cost Analysis HighLow Method HL a Variable Cost per Hour Identify the highest and lowest activity levels labor hours Highest ... View the full answer