Assessment 1 (Part A)

Appendix-A
Equations and detailed calculations

a) 1 year Information’s on pilot aviation outfits produced and the cost per month.
Number of pilot
aviation outfits
Month produced. (X) Cost $ (Y) XY X2
Jul 380 50,000 19,000,000 144,400
Aug 747 100,000 74,700,000 558,009
Sep 757 99,000 74,943,000 573,049
Oct 767 103,000 79,001,000 588,289
Nov 529 88,000 46,552,000 279,841
Dec 687 91,500 62,860,500 471,969
Jan 802 108,856 87,302,512 643,204
Feb 830 110,859 92,012,970 688,900
Mar 888 128,808 114,381,504 788,544
Apr 650 85,604 55,642,600 422,500
May 603 89,653 54,060,759 363,609
Jun 588 78,689 46,269,132 345,744

Total ∑ 𝒙 = 8228 ∑ 𝒚 = 1,133,969 ∑ 𝒙𝒚 = 806,725,977 ∑ 𝒙𝟐 =5,868,058

n= 12

b) Equation to find total cost is Y = a + bx

Where, a = fixed cost
b = Variable cost per unit
x = Number of units on that particular month
∑ 𝑦−𝑏 ∑ 𝑥 𝑛 ∑ 𝑥𝑦−∑ 𝑥 ∑ 𝑦
a= b= 2
𝑛 𝑛 ∑ 𝑥 2 −(∑ 𝑥)

1,133,969−(128.985𝑋8228) (12𝑋806,725,977)−(8,228𝑋1,133,969)
a= b=
12 (12𝑋5,868,058)−(8228)2
1,133,969−1,060,901.625
= =
9,680,711,724−9,330,296,932
12
73,067.375 70,416,696−67,699,984
=
12 350,414,792
=
2,7167,12
a = 6057 (Rounded to nearest decimal
point) b = 128.985

Therefore, variable cost per unit is $128.985 and fixed cost per month is $6057.
 Assessment 1 (Part A)

c) Total cost in a month when 685 pilot aviation outfits are produced:

We know, Y = a + bx
= 6057+ (128.985 X 685)

= 6057+ 88354.725

Y = 94411.725

Thus the predicted total cost in a month is $94411.725 when 685 pilot aviation outfits
are produced.