Q3 What is regression analysis and how does it help in estimating a cost f unction Interpret your results with a numerical example (2 Marks) Answer Q4 A plastic product is manufactured by SLT Company For total costs, the company estimates the cost function The number of units is the cost driver The following details were gathered (2 Marks) Month Units Total Cost (SAR) March 4 , 370 44 , 300 April 4 , 680 44 , 600 May 5 , 000 45 , 000 June 5 , 300 45 , 400 July 5 , 600 47 , 500 August 5 , 900 57 , 500 September 3 , 400 40 , 000 October 4 , 100 40 , 625 Use the high low analysis method and answer the following a) Calculate Variable Costs and fixed costs b) Determine the cost function Answer

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Question: Q3. What is regression analysis and how does it help in estimating a cost f unction? Interpret your results with a numerical example. (2 Marks)

Q3. What is regression analysis and how does it help in estimating a cost function? Interpret your results with a numerical example. (2 Marks)

Answer:

Q4. A plastic product is manufactured by SLT Company. For total costs, the company estimates the cost function. The number of units is the cost driver. The following details were gathered:

(2 Marks)

Month	Units	Total Cost (SAR)
March	4,370	44,300
April	4,680	44,600
May	5,000	45,000
June	5,300	45,400
July	5,600	47,500
August	5,900	57,500
September	3,400	40,000
October	4,100	40,625

Use the high-low analysis method and answer the following:

a) Calculate Variable Costs and fixed costs.

b) Determine the cost function.

Answer:

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