Your company is preparing an estimate of its production costs for the coming period. The controller estimates that direct materials costs are$45 per unit and that direct labor costs are$21 per hour. Estimating overhead, which is applied on the basis of direct labor costs, is difficult. The controller's office estimated overhead costs at $3,600 for fixed costs and $18 per unit for variable costs. Your colleague, Lance, who graduated from a rival school, has already done the analysis and reports the "correct" cost equation as follows: Overhead cost = $10,600 + $16.05 per unit Lance also reports that the correlation coefficient for the regression is .82 and says, "With 82 percent of the variation in overhead explained by the equation, it certainly should be adopted as the best basisfer estimating costs." When asked for the data used to generate the regression, Lance produces the following: Month Overhead Unit Production $57,144 60,756 77,040 56,412 81,396 72,252 63,852 73,596 77,772 60,048 3,048 3,248 4,176 3,000 3,408 3,928 .......... 2 3 4 ..... .... 7 ...... .. 8. 9. 10 3,336 4,016 4,120 3,192 ..... ........ .... .. 11 12 13 61,632 73,920 73,248 3,368 4,080 3,888 The company controller is somewhat surprised that the cost estimates are so different. You have therefore been assigned to check Lance's equation. You accept the assignment with glee. Required Analyze Lance's results and state your reasons for supporting or rejecting his cost equation.

Zhu Manufacturing is considering the Introduction of a family of new products. Long-term demand for the product group is somewhat predictable, so the manufacturer must be concemed with the risk of choosing a process that is inappropriate. Faye Zhu is VP of operations. She can choose among batch manufacturing or custom manufacturing, or she can invest in group technology, Zhu won't be able to forecast demand accurately until after she makes the process choice. Demand will be classified into four compartments: poor, fair, good, and excellebt The table below indicates the payoffs (profits) associated with each processidemand combination, as well as the probabilities of each long-term demand level: Demand Poor Fair Good Excellent Probability Batch Custom 0.15 0.40 -$300,000 $100,000 $1,200,000 $800,000 $400,000 $00,000 0.30 $1,200,000 $750,000 $500,000 0.15 $1,300,000 $800,000 $2,200,000 Group technology a) The alternative that provides Zhu the greatest expected monetary value (EMV) is…

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Mary Beth Marrs, the manager of an apartment complex, feels overwhelmed by the number of complaints she is receiving. Below is the check sheet she has kept for the past 12 weeks. E Click the icon to view the check sheet she has kept for the past 12 weeks. Using this information, choose the correct Pareto chart below. O A. O B. OC. D. 50, D 40- 30- 20- 10- 50, P 40- 30- 20- 10- 40- 30- G. P T P T G 30- G Тр 20- 10- 10- 0- I Parking/Drives (D) I Grounds (G) O Pool (P) O Tenant issues (T) I Electrical (E) 0- 0- 0- Parking/Drives (D) I Pool (P) O Grounds (G) O Tenant issues (T) Electrical (E) I Pool (P) I Grounds (G) O Tenant issues (T) O Parking/Drives (D) I Electrical (E) I Parking/Drives (D) | Pool (P) O Tenant issues (T) O Grounds (G) I Electrical (E) Frequency (number Frequency (number Frequency (number Frequency (number