! Required information [The following information applies to the questions displayed below.] The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the firm's costs will enable the firm to make better planning and control decisions. Among the costs the controller is concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and the amount of indirect materials used. A member of the controller's staff has suggested that least-squares regression be used to determine the cost behavior of indirect materials. The regression equation shown below was developed from 40 pairs of observations. S = $175 + $4H where S = Total monthly cost of indirect materials H = Machine hours per month 5. Use the high-low method to estimate the behavior of the company's indirect-material cost. Express the cost behavior pattern in equation form. (Round variable cost per machine hour to 2 decimal places.) Machine hours Indirect supplies: Beginning inventory Ending inventory Purchases Indirect material cost = April August 1,600 1,000 $1,900 $1,600 1,650 3,600 6,500 6,800 per machine hour
! Required information [The following information applies to the questions displayed below.] The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the firm's costs will enable the firm to make better planning and control decisions. Among the costs the controller is concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and the amount of indirect materials used. A member of the controller's staff has suggested that least-squares regression be used to determine the cost behavior of indirect materials. The regression equation shown below was developed from 40 pairs of observations. S = $175 + $4H where S = Total monthly cost of indirect materials H = Machine hours per month 5. Use the high-low method to estimate the behavior of the company's indirect-material cost. Express the cost behavior pattern in equation form. (Round variable cost per machine hour to 2 decimal places.) Machine hours Indirect supplies: Beginning inventory Ending inventory Purchases Indirect material cost = April August 1,600 1,000 $1,900 $1,600 1,650 3,600 6,500 6,800 per machine hour
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 1TIF: Ethics in Action The controller of Tri Con Global Systems Inc. has developed a new costing system...
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Required information
[The following information applies to the questions displayed below.]
The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the
firm's costs will enable the firm to make better planning and control decisions. Among the costs the controller is
concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and
the amount of indirect materials used.
A member of the controller's staff has suggested that least-squares regression be used to determine the cost behavior of
indirect materials. The regression equation shown below was developed from 40 pairs of observations.
S = $175 + $4H
where S = Total monthly cost of indirect materials
H = Machine hours per month
5. Use the high-low method to estimate the behavior of the company's indirect-material cost. Express the cost behavior pattern in
equation form. (Round variable cost per machine hour to 2 decimal places.)
Machine hours
Indirect supplies:
Beginning inventory
Ending inventory
Purchases
Indirect material cost =
April August
1,600 1,000
$1,900 $1,600
1,650 3,600
6,500
6,800
per machine hour](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F972665ab-e7b8-40ea-875b-5a17ebdd7bab%2F23484275-5721-486e-80c0-300e6c9d42e7%2F55rr7pm_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the
firm's costs will enable the firm to make better planning and control decisions. Among the costs the controller is
concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and
the amount of indirect materials used.
A member of the controller's staff has suggested that least-squares regression be used to determine the cost behavior of
indirect materials. The regression equation shown below was developed from 40 pairs of observations.
S = $175 + $4H
where S = Total monthly cost of indirect materials
H = Machine hours per month
5. Use the high-low method to estimate the behavior of the company's indirect-material cost. Express the cost behavior pattern in
equation form. (Round variable cost per machine hour to 2 decimal places.)
Machine hours
Indirect supplies:
Beginning inventory
Ending inventory
Purchases
Indirect material cost =
April August
1,600 1,000
$1,900 $1,600
1,650 3,600
6,500
6,800
per machine hour
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