Learning Goal: I’m working on a management discussion question and need the explanation and answer to help me learn.
.
The maintenance cost incurred and the actual machine hours worked during the months of January, February, March, and April 2003 were as follows:
|
Month |
Machine hours in Production departments |
Maintenance departments Costs |
|
|
|
Sh. |
|
January |
800 |
350 |
|
February |
1,200 |
350 |
|
March |
400 |
150 |
|
April |
1,600 |
550 |
Required:
- Determine the cost estimation function using:
- High-low method.(2 marks)
- Regression analysis(2marks)
- Using the regression function estimate:
- The maintenance costs that would have been incurred if the machine hours were expected to be 900 in the month of May 2003.(1 mark)
