Mega Byte Company manufactures wireless handheld devices. Because there is intense competition in the market for...
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Mega Byte Company manufactures wireless handheld devices. Because there is intense competition in the market for these devices, understanding and using cost behaviour is critical to Mega Byte's profitability. Mega Byte's controller, Kelly Hudsa, has kept meticulous files on various cost categories and possible cost drivers for most of the important functions and activities of Mega Byte. Because most of the manufacturing at Mega Byte is automated, labour cost is relatively fixed. Other support costs comprise most of Mega Byte's costs. Below are partial data that Hudsa has collected on one of these support costs, logistics operations (materials purchasing, receiving, warehousing, and shipping) over the past 25 weeks. 1. Plot logistics cost versus number of orders (you can use excel or graph paper) 2. How would you describe the cost behaviour over the 25 weeks of recorded data? 3. Using the High-Low Method, please provide an equation to express logistics cost during weeks 1 to 13. 4. Using the High-Low Method, please provide an equation to express logistics cost during weeks 14 to 25. 5. In one or two sentences, please compare and contrast your findings for weeks 1 to 13, and weeks 14 to 25. 6. Going forward, which equation would you recommend to predict future logistics cost, and explain your reasoning. 7. Using your preferred equation, please estimate the logistics cost for 1,400 orders? Please submit your graphs, and calculations along with answers to questions 1 to 7. Week Number of Orders Logistics Cost 1,357 $23,907 2 1,077 18,265 3 1,383 24,208 4 1,486 23,578 1,292 22,211 6 1,425 22,862 7 1,306 23,303 8 1,373 23,757 1,031 17,878 10 1,020 18,306 11 1,097 20,807 12 1,069 19,707 13 1,444 23,020 14 733 20,407 15 413 20,370 16 633 20,678 17 711 21,145 18 228 20,775 19 488 20,532 20 655 20,659 21 722 20,430 22 373 20,713 23 391 20,256 24 734 21,196 25 256 20,406 Mega Byte Company manufactures wireless handheld devices. Because there is intense competition in the market for these devices, understanding and using cost behaviour is critical to Mega Byte's profitability. Mega Byte's controller, Kelly Hudsa, has kept meticulous files on various cost categories and possible cost drivers for most of the important functions and activities of Mega Byte. Because most of the manufacturing at Mega Byte is automated, labour cost is relatively fixed. Other support costs comprise most of Mega Byte's costs. Below are partial data that Hudsa has collected on one of these support costs, logistics operations (materials purchasing, receiving, warehousing, and shipping) over the past 25 weeks. 1. Plot logistics cost versus number of orders (you can use excel or graph paper) 2. How would you describe the cost behaviour over the 25 weeks of recorded data? 3. Using the High-Low Method, please provide an equation to express logistics cost during weeks 1 to 13. 4. Using the High-Low Method, please provide an equation to express logistics cost during weeks 14 to 25. 5. In one or two sentences, please compare and contrast your findings for weeks 1 to 13, and weeks 14 to 25. 6. Going forward, which equation would you recommend to predict future logistics cost, and explain your reasoning. 7. Using your preferred equation, please estimate the logistics cost for 1,400 orders? Please submit your graphs, and calculations along with answers to questions 1 to 7. Week Number of Orders Logistics Cost 1,357 $23,907 2 1,077 18,265 3 1,383 24,208 4 1,486 23,578 1,292 22,211 6 1,425 22,862 7 1,306 23,303 8 1,373 23,757 1,031 17,878 10 1,020 18,306 11 1,097 20,807 12 1,069 19,707 13 1,444 23,020 14 733 20,407 15 413 20,370 16 633 20,678 17 711 21,145 18 228 20,775 19 488 20,532 20 655 20,659 21 722 20,430 22 373 20,713 23 391 20,256 24 734 21,196 25 256 20,406
Expert Answer:
Answer rating: 100% (QA)
1 Plot made on Excel by going to insert tab and choose a line chart by selecting the inputs in the Excel sheet 2 To check the cost behaviour over week... View the full answer
Related Book For
Macroeconomics Principles and Applications
ISBN: 978-1133265238
5th edition
Authors: Robert e. hall, marc Lieberman
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