Appreciate if someone can assist me with the below question as I am really stuck
Part A
Little Red Hood Inc. management has estimated the factory overhead cost as $1090 variable cost and $1430 fixed cost to make 100 units using 500 machine hours.
Required:
1. Using the above information, derive the cost equation in the form of Y = a + bx.
2. Predict the cost with 550 machine hours.
3. Compare the above method of cost estimation with engineering approach, with respect to the costs and benefits of the two approaches.
Part B
You are provided with the cost data from twelve observations of electricity, a semi-variable cost.
Refer the data via the link below
https://ibb.co/eF9R7a
Required:
Part A
Little Red Hood Inc. management has estimated the factory overhead cost as $1090 variable cost and $1430 fixed cost to make 100 units using 500 machine hours.
Required:
1. Using the above information, derive the cost equation in the form of Y = a + bx.
2. Predict the cost with 550 machine hours.
3. Compare the above method of cost estimation with engineering approach, with respect to the costs and benefits of the two approaches.
Part B
You are provided with the cost data from twelve observations of electricity, a semi-variable cost.
Refer the data via the link below
https://ibb.co/eF9R7a
Required:
- Use scatter graph to estimate the cost equation (Y = a + bx).
- Estimate the cost equation using high low method
- Estimate the cost equation using regression analysis.
- Predict the cost of electricity (using all the three methods 1-3) for the month in which 38000 machine hours are used.