Homework Help is Here – Start Your Trial Now!
Business
Operations Management
The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Quarter Year 1: First Second Third Fourth Year 2:1 First Second Third Fourth Tons Mined 18,000 13,000 23,000 15,000 21,000 28,000 33,000 31,000 Direct Labor- Hours 5,300 3,300 4,300 6,300 10,600 9,900 8,600 11,600 Utilities Cost $ 53,000 $ 48,000 $ 63,000 $78,000 $ 115,000 $ 120,000 $ 88,000 $ 126,000

The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Quarter Year 1: First Second Third Fourth Year 2:1 First Second Third Fourth Tons Mined 18,000 13,000 23,000 15,000 21,000 28,000 33,000 31,000 Direct Labor- Hours 5,300 3,300 4,300 6,300 10,600 9,900 8,600 11,600 Utilities Cost $ 53,000 $ 48,000 $ 63,000 $78,000 $ 115,000 $ 120,000 $ 88,000 $ 126,000

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question
Required information The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Quarter Year 1: First Second Third Fourth Year 2: First Second Third Fourth Tons Mined 18,000 13,000 23,000 15,000 21,000 28,000 33,000 31,000 Direct Labor- Hours 5,300 3,300 4,300 6,300 10,600 9,900 8,600 11,600 Utilities Cost $ 53,000 $ 48,000 $ 63,000 $ 78,000 $ 115,000 $ 120,000 $ 88,000 $ 126,000
Transcribed Image Text:Required information The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Quarter Year 1: First Second Third Fourth Year 2: First Second Third Fourth Tons Mined 18,000 13,000 23,000 15,000 21,000 28,000 33,000 31,000 Direct Labor- Hours 5,300 3,300 4,300 6,300 10,600 9,900 8,600 11,600 Utilities Cost $ 53,000 $ 48,000 $ 63,000 $ 78,000 $ 115,000 $ 120,000 $ 88,000 $ 126,000
1-b. Using the least-squares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost per quarter. Express these estimates in the form Y=a+bX. (Round the Variable cost per unit to 2 decimal places and Fixed Cost to the nearest whole dollar amount.)
Transcribed Image Text:1-b. Using the least-squares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost per quarter. Express these estimates in the form Y=a+bX. (Round the Variable cost per unit to 2 decimal places and Fixed Cost to the nearest whole dollar amount.)
Expert Solution
steps

Step by step

Solved in 4 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS