Enzo the management accountant at JVC Ltd, is examining the behaviour of quarterly maintenance costs for...
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Enzo the management accountant at JVC Ltd, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Enzo collects the following data on machine-hours worked and maintenance costs for the past eight quarters: + Quarter 1 2 3 4 5 678 Machine-hours 120 000 75 000 110 000 150 000 90 000 140 000 130 000 100 000 Maintenance costs $215 000 150 000 200 000 270 000 170 000 250 000 225 000 195 000 Required 1. Use the high-low method to calculate the function, relating machine hours and maintenance costs. 2. Use the simple regression method to calculate the cost function, relating machine hours and maintenance costs. 3. Using: (a) the regression equation and (b) the high-low equation, what is the increase in maintenance cost for each 1 000 hours use on machine hours. 30 MARKS 20 MARKS 20 MARKS Enzo the management accountant at JVC Ltd, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Enzo collects the following data on machine-hours worked and maintenance costs for the past eight quarters: + Quarter 1 2 3 4 5 678 Machine-hours 120 000 75 000 110 000 150 000 90 000 140 000 130 000 100 000 Maintenance costs $215 000 150 000 200 000 270 000 170 000 250 000 225 000 195 000 Required 1. Use the high-low method to calculate the function, relating machine hours and maintenance costs. 2. Use the simple regression method to calculate the cost function, relating machine hours and maintenance costs. 3. Using: (a) the regression equation and (b) the high-low equation, what is the increase in maintenance cost for each 1 000 hours use on machine hours. 30 MARKS 20 MARKS 20 MARKS
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Answer rating: 100% (QA)
HighLow Method To calculate the cost function using the highlow method well first find the variable cost per machinehour and then use it to determine ... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9780135628478
17th Edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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