Kelly’s Boutique Month Employees Payroll
Ch 07-05 Solution Jan 8 33,000
Predicting Costs Feb 12 60,000
Mar 11 54,000
Apr 14 47,000
May 17 78,000
Hi-Lo Method
Variable cost/employee 3,656.25$
Fixed cost 3,750.00$
Prediction of expense with 43 employees = 160,969$
Least Squares / Regression Method
Variable cost/employee 3,814.44$
Fixed cost 8,346.85$
Prediction of expense with 43 employees = 172,368$
143,000
163,000
183,000
P
Payroll/Employees
High Activity 40 150,000
Low Activity 8 33,000