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  • Acct2121hw2 10-35

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    Ckay Lee
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    1.) The document shows machine hours and maintenance costs data for a company over several quarters. It finds a linear relationship between machine hours and maintenance costs, with maintenance costs increasing by $2 for every 1,000 machine hours. 2.) A graph of the data shows a clear positive relationship between machine hours and maintenance costs, fitting the engineering relationship well with small differences between actual and predicted costs. 3.) Based on the linear relationship, maintenance costs of $200,000 are predicted for the next quarter if machine hours are 100,000, providing a budget for maintenance costs.

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    ACCT2121HW2 10-35

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    1.) The document shows machine hours and maintenance costs data for a company over several quarters. It finds a linear relationship between machine hours and maintenance costs, with maintenance costs increasing by $2 for every 1,000 machine hours. 2.) A graph of the data shows a clear positive relationship between machine hours and maintenance costs, fitting the engineering relationship well with small differences between actual and predicted costs. 3.) Based on the linear relationship, maintenance costs of $200,000 are predicted for the next quarter if machine hours are 100,000, providing a budget for maintenance costs.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    6 views2 pages

    Acct2121hw2 10-35

    Uploaded by

    Ckay Lee
    1.) The document shows machine hours and maintenance costs data for a company over several quarters. It finds a linear relationship between machine hours and maintenance costs, with maintenance costs increasing by $2 for every 1,000 machine hours. 2.) A graph of the data shows a clear positive relationship between machine hours and maintenance costs, fitting the engineering relationship well with small differences between actual and predicted costs. 3.) Based on the linear relationship, maintenance costs of $200,000 are predicted for the next quarter if machine hours are 100,000, providing a budget for maintenance costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    1.

    ) Machine hours Maintenance costs


    280,000
    Highest observation 140,000

    Lowest observation 99,000 190,000

    Difference 45,000 $90,000

    Montane ask = atbx Machine hours

    b=$¥¥%- = $2
    per
    machine hair

    A =
    280,000
    -
    (2×140,000)
    =
    280,00 -

    280,000
    =
    $0
    Gstfunction Mamtance costs $2 ✗ Machine
    hairs
    -

    : =
    -HgIst£-_☒x_€€€%
    A Maintenance costs
    graph
    2.) as a function of machine hours

    ↳ There is clear-cut d- higher machine hours &


    engineering relationship
    a
    -

    Maintenance asst Hence the cost function has a positive economic plausibility
    .

    relationship between machine hams & maintenance costs


    fit the data
    " "

    IN line to well The vertical


    ↳ The high
    -

    appears .

    between the actual & costs are small


    differences predicted
    ↳ The slope of the line is
    relatively steep Hence on average
    .

    , ,

    maintenance costs in a quoter is dependent on the machine hours

    used in the quarter

    651s 100,000 $2
    3.) maintenance ✗
    Predicted
    =

    =
    $200,000

    $200,00 for KMW Corporation quarter


    budget
    in
    Howard should
    the relationship between hours & maintenance
    machine
    13 since
    d- fit is good and
    costs is
    economically plausible the goodness
    ,

    there is an indication d- the increase in machine hours in a

    costs to increase in the


    maintenance
    grater can cause the

    quarter as well .

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