(c2) Estimated daily production costs for April 1 using both the high-low method and the regression model and actual manufacturing costs incurred on April 1 are provided here. Units manufactured Total cost 3,897 $296,512 Estimated cost using high-low method Estimated cost using the regression model Actual cost $300,486 $296,149 $296,512 Identify which is the most reliable approach to estimating costs and explain why.

(c2) Estimated daily production costs for April 1 using both the high-low method and the regression model and actual manufacturing costs incurred on April 1 are provided here. Units manufactured Total cost 3,897 $296,512 Estimated cost using high-low method Estimated cost using the regression model Actual cost $300,486 $296,149 $296,512 Identify which is the most reliable approach to estimating costs and explain why.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

(c2) Estimated daily production costs for April 1 using both the high-low method and the regression model and actual manufacturing
costs incurred on April 1 are provided here.
Units manufactured
Total cost
3,897
$296,512
Estimated cost using high-low method
Estimated cost using the regression model
Actual cost
B
$300,486
$296,149
$296,512
Identify which is the most reliable approach to estimating costs and explain why.
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