Instructions

$1$ Atimwer Ali questroms

$3$ Marks allocared for each quesuon is mdraied aa bhe end of the quesuon:

$3$ Show ill you warkmge

Questian Ome

$2020$

Requred

a$)$ Estumete the cost functron usmg the followigg methods:

$(4)$ Figh lorty ritethod

$($ii$)$ Regression anilyssy method

moured for $60$ madtime hours:

answersThe following information relates to bright star company ltd for the year ended $31$st December $2022$

Machine hour Overhead costs

$4010,000$

$359,000$

$5012,500$

$4511,500$

$206,000$

$308,500$

$256,500$

$5513,500$

$4311,000$

$389,400$

$288,200$

$328,700$

Required

a$)$ Estimate the cost function using the following methods.

$($i$)$ High low method $(4$ marks$)$

$($ii$)$ Regression analysis method $(8$ marks$)$

b$)$ Using the functions obtained in $($a$)($i$)$ and $($ii$)$ above estimate the overhead costs to be incurred for $60$ machine hours $(4$ marks$)$

c$)$ Calculate correlation coefficient and coefficient of determination and interpret your answers