J 1 Required informationThe 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 thatcorrelates with the cost. The controller has suggested that tons mined might be a good base to use in developing a costformula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The costanalyst has decided to try both bases and has assembled the following information:QuarterYear 1:1FirstSecondThirdFourthYear 2:FirstSecondThirdFourthDirectTons Mined Labor-Hours17,00013,00022,00014,00020,00027,00032,00030,0005,2003,2004,2006,20010,4009,6008,40011,400UtilitiesCost$ 52,000$ 47,000$ 62,000$ 77,000$110,000$115,000$ 87,000$124,000Required:1. Using the least-squares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost perquarter. Express these estimates in the form Ya+bX. (Round the Variable cost per unit to 2 decimal places and Fixed Cost to thenearest whole dollar amount.)

Mathematic models of decision-making help businesses take the correct decision for their operational…

Answered: Required: 1. Using the least-squares…

Marketing

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ISBN:9780357033791

Author:Pride, William M

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Chapter19: Pricing Concepts

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