76) Grawburg Inc. maintains a call center to take orders, answer questions, and handle complaints.
The costs of the call center for a number of recent months are listed below:
Calls Taken
Call Center Cost
April
9,030
112,323
May
9,017
112,278
June
9,035
112,341
July
9,065
112,458
August
9,015
112,290
September
9,061
112,419
October
9,070
112,463
November
9,067
112,439
Management believes that the cost of the call center is a mixed cost that depends on the number of
calls taken.
Required:
Estimate the variable cost per call and fixed cost per month using the least-squares regression
method.
95
77) Furlan Printing Corp., a book printer, has provided the following data:
Titles
Printed
Press
Setup Cost
May
40
$
6,649
June
38
$
6,438
July
25
$
5,307
August
28
$
5,564
September
33
$
6,030
October
27
$
5,505
November
39
$
6,551
December
36
$
6,275
Management believes that the press setup cost is a mixed cost that depends on the number of titles
printed. (A specific book that is to be printed is called a “title”. Typically, thousands of copies will
be printed of each title. Specific steps must be taken to setup the presses for printing each title-for
example, changing the printing plates. The costs of these steps are the press setup costs.)
Required:
Estimate the variable cost per title printed and the fixed cost per month using the least-squares
regression method.
97
78) The management of Rutledge Corporation would like to better understand the behavior of the
company’s warranty costs. Those costs are listed below for a number of recent months:
Product
Returns
Warranty Cost
March
30
3,648
April
37
4,074
May
43
4,460
June
41
4,330
July
32
3,756
August
48
4,782
September
35
3,932
October
33
3,823
Management believes that warranty cost is a mixed cost that depends on the number of product
returns.
Required:
Estimate the variable cost per product return and the fixed cost per month using the least-squares
regression method.
99
79) Below are cost and activity data for a particular cost over the last four periods. Your boss has
asked you to analyze this cost so that management will have a better understanding of how this
cost changes in response to changes in activity.
Activity
Cost
Period 1
46
791
Period 2
40
738
Period 3
47
807
Period 4
41
746
Required:
Using the least-squares regression method, estimate the cost formula for this cost.
80) Utility costs at one of Hannemann Corporation’s factories are listed below:
Machine-Hours
Utility Cost
March
5,021
$52,824
April
5,076
$53,287
May
5,074
$53,263
June
5,040
$52,991
July
5,087
$53,371
August
5,073
$53,251
September
5,075
$53,252
October
5,034
$52,916
November
5,062
$53,137
Management believes that utility cost is a mixed cost that depends on machine-hours.
Required:
Estimate the variable cost per machine-hour and the fixed cost per month using the high-low
method. Show your work!
High activity level (July)
Low activity level (March)
Change
81) Swofford Inc. has provided the following data concerning its maintenance costs:
Machine-Hours
Maintenance Cost
March
4,440
$50,950
April
4,431
$50,877
May
4,412
$50,696
June
4,460
$51,113
July
4,414
$50,711
August
4,433
$50,900
September
4,443
$50,976
October
4,415
$50,730
November
4,391
$50,530
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
Required:
Estimate the variable cost per machine-hour and the fixed cost per month using the high-low
method. Show your work!
High activity level (June)
Low activity level (November)
Change
82) The management of Dethlefsen Corporation would like to have a better understanding of the
behavior of its inspection costs. The company has provided the following data:
Direct Labor-Hours
Inspection Cost
January
5,089
$33,122
February
5,042
$32,929
March
5,026
$32,870
April
5,073
$33,065
May
5,029
$32,906
June
5,040
$32,913
July
5,070
$33,050
August
5,027
$32,875
September
4,995
$32,746
Management believes that inspection cost is a mixed cost that depends on direct labor-hours.
Required:
Estimate the variable cost per direct labor-hour and the fixed cost per month using the high-low
method. Show your work!
Direct Labor-Hours
High activity level (January)
Low activity level (September)
Change