Solution-Costs and benefits of the two approaches

Costs and benefits of the two approaches

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Reference no: EM131115144

Little Red Hood Inc. management has estimated the factory overhead cost as $1090 variable cost and $1430 fixed cost to make 100 units using 500 machine hours.

Required:

1. Using the above information, derive the cost equation in the form of Y = a + bx.

2. Predict the cost with 550 machine hours.

3. Compare the above method of cost estimation with engineering approach, with respect to the costs and benefits of the two approaches.

Reference no: EM131115144

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Costs and benefits of the two approaches

Reference no: EM131115144

Reference no: EM131115144

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