Using the high-low point method, compute the fixed cost. Using the high-low point method, how much are the estimated overhead costs for 3,000 machine hours? Using the least square (regression) analysis, compute the fixed cost. Using the least square (regression) analysis, how much are the estimated overheads for 3,000 machine hours
Nas Corporation's managers in the stamping department have been studying the overhead cost and the relationship with machine hours. The following are data from the most recent 12 months.
|
Month |
Overhead |
Machine hours |
|
January |
5,030 |
2,730 |
|
February |
1,600 |
600 |
|
March |
7,210 |
3,403 |
|
April |
4,560 |
2,200 |
|
May |
6,880 |
3,411 |
|
June |
6,520 |
2,586 |
|
July |
6,230 |
3,364 |
|
August |
5,570 |
2,411 |
|
September |
7,728 |
3,960 |
|
October |
5,810 |
2,897 |
|
November |
4,580 |
2,207 |
|
December |
6,010 |
2,864 |
The manager of the department has requested a regression analysis of these two variables. The staff person performing the analysis decided to exclude February. She observed the volume of activity was very low for that month because of two factors: a severe flue outbreak and an electrical fire that disrupted operations for about 10 working days.
- Using the high-low point method, compute the fixed cost.
- Using the high-low point method, how much are the estimated overhead costs for 3,000 machine hours?
- Using the least square (regression) analysis, compute the fixed cost.
- Using the least square (regression) analysis, how much are the estimated overheads for 3,000 machine hours?
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