Solution-What is the equation for administrative costs

What is the equation for administrative costs

Reference no: EM132819395

Question - Yates Corp. wants to develop a cost equation for its administrative costs. The controller believes the appropriate cost driver is units produced. Last year's data are presented below:

Month	Units produced	Administrative Costs
January	32,500	$24,288
February	37,700	27,720
March	24,700	17,820
April	40,300	30,360
May	49,400	37,290
June	42,900	29,040
July	53,300	32,670
August	45,500	30,030
September	26,000	20,460
October	48,100	34,320
November	61,100	40,920
December	54,600	36,630
Total	516,100	$361,548
Average	43,008	$30,129

Required -

(a) What is the equation for administrative costs using the high-low method?

(b) Prepare an estimate of administrative costs for a month when 30,000 units are produced.

(c) Based on your estimate in the previous question comment on whether the high-low method would give a reliable estimate from this data.

Reference no: EM132819395

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What is the equation for administrative costs

Reference no: EM132819395

Reference no: EM132819395

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