Statler Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2021. The following cost and other data were gathered for 2020:(Click the icon to view the cost and other data)Read the requirements.Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain.CostfunctionMixedFixedVariableCostMaintenanceHealth insuranceShipping costsRequirement 2. Using the high-low method, determine the cost function for each cost.Begin by selecting the general formula that represents the linear cost function for each cost.y = a +bXy = ay = bXMaintenanceHealth insuranceShipping costsNow determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If an input field is not used in theCost functionMaintenanceExplanationThe cost neither remains constant in total nor remains constant per unit.Although the cost driver varies from month to month, the total cost remains constant.The cost per unit remains constant each month.Health insuranceShipping costsy =y =y =5230++2x per machine hourper employeeper unit shippedData tableMonthJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberGAMaintenance Machine HealthCostsHours Insurance4,570 160 $ 8,5604,430 115 $ 8,5604,6802278,5604,830 3068,5605,195 4648,5604,751 2768,5604,912 348 $ 8,5604,932 368 $ 8,5605,033 4238,5605,211 4708,5605,230 5158,5608,5604,751 274PrintNumber ofEmployees61839810788918984971139093DoneShipping UnitsCosts Shipped$ 20,677 7,130$ 24,012 8,28022,968 7,92018,792 6,48017,08126,85425,346$ 24,534$$$5,8909,2608,7408,4606,7807,1705,630$ 19,662$ 20,79316,32728,014$9,660SAX

Fixed Costs: These are costs that remain constant regardless of the level of production or activity…

Statler Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2021. The following cost and other data were gathered for 2020: (Click the icon to view the cost and other data) Read the requirements. Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. Cost function Mixed Fixed Variable Cost Maintenance Health insurance Shipping costs Requirement 2. Using the high-low method, determine the cost function for each cost. Begin by selecting the general formula that represents the linear cost function for each cost. Maintenance y = a +bx Health insurance Shipping costs Explanation The cost neither remains constant in total nor remains constant per unit. Although the cost driver varies from month to month, the total cost remains constant. The cost per unit remains constant each month. y=a y= bX y= y= y= Now determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If an input field is not used in the Cost function Maintenance Health insurance Shipping costs 5230 + 2x per machine hour per employee per unit shipped Data table Month January February March April May June July August September October November December Maintenance Costs $ $ $ $ $ $ $ $ $ $ $ $ $ 22,968 $ 18,792 61 83 98 107 88 91 89 84 Machine Health Number of Shipping Units Hours Insurance Employees Costs Shipped 4,570 160 $ 8,560 $ 20,677 7,130 4.430 115 $ 8,560 $ 24,012 8,280 4,680 227 $ 8,560 7,920 4,830 306 $ 8,560 6,480 5,195 464 $ 8.560 5,890 4,751 276 $ 8,560 4,912 348 $ 8,560 4,932 368 $ 8,560 8,560 8,560 8,560 8,560 $ 17,081 $ 26,854 9,260 $ 25,346 8,740 8,460 $ 24,534 $ 19,662 6,780 $ 20,793 7,170 5,033 423 $ 5,211 470 $ 5,230 515 $ 4,751 274 $ 97 113 90 93 $ 16,327 5,630 $ 28,014 9,660 Print Done

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 9EA: The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express...