Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six months. Total Hours Total Utility Month of Operation January 400 February 600 March April May June 750 350 300 250 Cost $2,220 3,000 3,600 2,100 1,750 1,600 Required: 1-a. Use the high-low method to estimate the cost behavior for the store's utility costs, Express the cost behavior in formula form (Y = a + bx). 1-b. What is the variable utility cost per hour of operation? 3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form. 3-b. What is the variable utility cost per hour of operation? 4. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each of the cost-estimation methods employed in requirements (1) and (3).

Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six months. Total Hours Total Utility Month of Operation January 400 February 600 March April May June 750 350 300 250 Cost $2,220 3,000 3,600 2,100 1,750 1,600 Required: 1-a. Use the high-low method to estimate the cost behavior for the store's utility costs, Express the cost behavior in formula form (Y = a + bx). 1-b. What is the variable utility cost per hour of operation? 3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form. 3-b. What is the variable utility cost per hour of operation? 4. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each of the cost-estimation methods employed in requirements (1) and (3).

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 57P: Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent...

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