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Question - Assume that the product manager of ABC Ltd is concerned about the apparent fluctuations in efficiency and therefore work done by employees which are related to the volume. The result of this in most 12 weeks' research carried out is as shown below;
Week
Machine hours (cost driver)
Indirect labor costs in RWF
1.
68
1,190
2.
88
1,211
3.
62
1,004
4.
72
917
5.
60
770 30
6.
96
1,456
7.
78
1,180
8.
46
710
9.
82
1,316
10.
94
1,032
11.
752
12.
48
963
Required -
(a) Find the indirect labor costs associated with 90 machine hours.
(b) Find the machine hours that 1,000RWF of indirect labor cost would produce using i) Regression model ii) High - low method estimates and of the cost function.
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