Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours $ 2,665 2,710 2,760 1 2 3 4 6 7 8 9 10 11 12 2,860 2,895 Maintenance cost 3,045 2,905 2,945 2,820 2,610 2,630 2,930 1,566 1,670 1,685 1,735 1,855 1,890 1,865 1,885 1,775 1,450 1,630 1,465 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) ✓ Answer is complete and correct. S 0.9886 1,177 + X M = Machine Hours 3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final answer as a percentage rounded to 1 decimal place (i.e., .054 = 5.4%).) Answer is complete but not entirely correct. 7.3 X % Mean absolute percentage error (MAPE)
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours $ 2,665 2,710 2,760 1 2 3 4 6 7 8 9 10 11 12 2,860 2,895 Maintenance cost 3,045 2,905 2,945 2,820 2,610 2,630 2,930 1,566 1,670 1,685 1,735 1,855 1,890 1,865 1,885 1,775 1,450 1,630 1,465 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.) ✓ Answer is complete and correct. S 0.9886 1,177 + X M = Machine Hours 3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final answer as a percentage rounded to 1 decimal place (i.e., .054 = 5.4%).) Answer is complete but not entirely correct. 7.3 X % Mean absolute percentage error (MAPE)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter7: Linear Regression
Section: Chapter Questions
Problem 3P: Jensen Tire Auto is deciding whether to purchase a maintenance contract for its new computer wheel...
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Transcribed Image Text:Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is
concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were
higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's
profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the
previous fiscal year for maintenance costs and machine hours follow:
Month Maintenance Costs Machine Hours
$ 2,665
2,710
2,760
1
2
3
4
6
7
8
9
10
11
12
2,860
2,895
Maintenance cost
3,045
2,905
2,945
2,820
2,610
2,630
2,930
1,566
1,670
1,685
1,735
1,855
1,890
1,865
1,885
1,775
1,450
1,630
1,465
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit
variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to
nearest whole dollar.)
✓ Answer is complete and correct.
S
0.9886
1,177 +
X
M = Machine Hours
3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final
answer as a percentage rounded to 1 decimal place (i.e., .054 = 5.4%).)
Answer is complete but not entirely correct.
7.3 X %
Mean absolute percentage error (MAPE)
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