Compute the variable and fixed component of the utility cost

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Reference no: EM132633866

The following data related to Jenel Company's utility costs for the past 6 months are as follows (based on kilowatt hours (kWh)):

kWhs        Total cost ($)

120        4,000

200       6,500

150       4,750

180      5,600

220       7,200

175       5,350

Required:

Question 1: · Using high low method, determine the cost formula for utility costs of the company. Determine the variable component per hour and the total fixed cost associated to it.

Question 2: Using your answers on the first requirement, compute for the expected total cost of the company if they projected their kilowatt hours used at 135 hours.

Question 3: · Using your answers on the first requirement, how many kWhs will the company expect to use if they budgeted their next month's utility costs at $5,280?

Question 4: Compute the variable and fixed component of the utility costs of Jenel using least squares analysis and derive the cost formula based on your computations.

Reference no: EM132633866

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