Atlanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year: Show Month Utilities Machine Hours January $8,700 800 February 8,360 720 March 8,950 810 April 9,360 920 May 9,625 950 June 9,150 900 The variable utilities cost per machine hour is: A. $0.18. B. $4.50. C. $5.00. D. $5.50. E. an amount other than those listed above. Atlanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year: Month Utilities Machine Hours January $8,700 800 February 8,360 720 March 8,950 810 April 9,360 920 May 9,625 950 June 9,150 900 The fixed utilities cost per month is: A. $3,764. B. $4,400. C. $4,760. D. $5,100. E. an amount other than those listed above. Atlanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year: Month Utilities Machine Hours January $8,700 800 February 8,360 720 March 8,950 810 April 9,360 920 May 9,625 950 June 9,150 900 Using the high-low method, the utilities cost associated with 980 machine hours would be: A. $9,510. B. $9,660. C. $9,700. D. $9,790. E. an amount other than those listed above. Northridge, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled $9.75. On the basis of this information, the company's fixed maintenance costs were: A. $24,000. B. $90,000. C. $210,00. D. $234,000. E. an amount other than those listed above. Yang Manufacturing, which uses the high-low method, makes a product called Yin. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. Type A Type B Type C Total 5,000 units $4 $9 $4 $17 7,500 units $4 $6 $3 $13 If Yang produces 10,000 units, the total cost would be: A. $90,000. B. $100,000. C. $110,000. D. $125,000. E. an amount other than those given above. Yang Manufacturing, which uses the high-low method, makes a product called Yin. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. Type A Type B Type C Total 5,000 units $4 $9 $4 $17 7,500 units $4 $6 $3 $13 The cost formula that expresses the behavior of Yang's total cost is: A. Y = $0 + $17X. B. Y = $20,000 + $13X. C. Y = $40,000 + $9X. D. Y = $45,000 + $4X. E. Y = $60,000 + $5X. Tempe, Inc., is studying marketing cost and sales volume, and has generated the following information by use of a scatter diagram and a least-squares regression analysis: Scatter Diagram Regression Analysis Variable cost per unit sold $6.50 $6.80 Total monthly fixed cost $45,000 $42,500 Tempe is now preparing an estimate for monthly sales of 18,000 units. On the basis of the data presented, compute the most accurate sales forecast possible. A. $159,500. B. $162,000. C. $164,900. D. $167,400. E. An amount other than those listed above. Recommended textbook solutions Essentials of Investments9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 689 solutions Financial Accounting4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas 1,097 solutions Fundamentals of Financial Management, Concise Edition10th EditionEugene F. Brigham, Joel Houston 777 solutions
Financial Management: Theory and Practice15th EditionEugene F. Brigham, Michael C Ehrhardt 218 solutions Which of the following cost estimation relies only to two data points?The high-low method assumes that fixed and unit variable costs are constant, which is not the case in real life. Because it uses only two data values in its calculation, variations in costs are not captured in the estimate.
What is the methods of estimation cost?The four major analytical methods or cost estimation techniques used to develop cost estimates for acquisition programs are Analogy, Parametric (Statistical), Engineering (Bottoms Up), and Actual Costs.
Which one of the following cost estimation methods is the most accurate quizlet?Which one of the following cost estimation methods is the most accurate? Regression analysis. In least squares regression analysis, the cost to be estimated is the: Dependent variable.
Which cost estimation method is the least accurate or the most subjective?Regression analysis is the least accurate method used to develop cost estimation models. The scattergraph method is advantageous because decision makers are able to easily identify outliers.
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Which of the following cost estimation method relies only to two data points?
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