As the cost accountant, you have identified thee potential cost drivers: number of units produced (X1), number of labor hours (X2), and number of purchase orders (X3). You have collected data on these three cost drivers, displayed below:

As the cost accountant, you have identified thee potential cost drivers: number of units produced (X1), number of labor hours (X2), and number of purchase orders (X3). You have collected data on these three cost drivers, displayed below:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

100%

I need to find the slope and the intercept. For the slope round to two decimal places, and for the intercept round to the nearest dollar

Week Costs ($)
1
2
3
4
LO
5
6
7
8
9
10
11
12
$14,300
$22,800
$14,665
$21,453
$18,445
$18,378
$18,178
$19,848
$18,037
$14,162
$21,439
Week
$16,432
As the cost accountant, you have identified thee potential cost drivers: number of units produced (X1),
number of labo ho (X2), and number of hase orders (X3). You have collected data on these three
cost drivers, displayed below:
Units Hours POs
X1
X2
X3

Week X1
1
2
3
4.
5
6
7
8
9
10
11
Units Hours POs
12
198
478
239
418
252
398
317
340
425
142
419
158
X2
the slope (b)
42
69
51
65
51
58
62
66
47
46
58
58
X3
159
285
97
204
167
179
177
219
239
68
309
107
You have selected Purchase Orders (X3) as your independent variable. Use the High-Low Method to
calculate:
(do not use dollar signs. round to two decimal places)
the intercept, (a)

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Step 2: Calculate the variable cost per unit (slop) and fixed cost (intercept)

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