Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours 1 $ 2,620 1,710 2 2,780 1,790 3 2,930 1,870 4 3,040 1,890 5 3,120 1,920 6 3,090 1,900 7 3,030 1,880 8 2,870 1,860 9 2,640 1,720 10 2,240 1,120 11 2,250 1,320 12 2,470 1,610 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. O Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final answer as a percentage rounded to 1 decimal place (i.e., 0.054 = 5.4%). Include any outliers in your calculations.) Mean absolute percentage error (MAPE) 5.3% < Required 1 Required 2 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
None
Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in
estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine
hours. These data are from the previous fiscal year for maintenance costs and machine hours:
Month
Maintenance Costs Machine Hours
1
$ 2,620
1,710
2
2,780
1,790
3
2,930
1,870
4
3,040
1,890
5
3,120
1,920
6
3,090
1,900
7
3,030
1,880
8
2,870
1,860
9
2,640
1,720
10
2,240
1,120
11
2,250
1,320
12
2,470
1,610
Required:
1. What is the cost equation for maintenance costs using the high-low method?
2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
O Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final
answer as a percentage rounded to 1 decimal place (i.e., 0.054 = 5.4%). Include any outliers in your calculations.)
Mean absolute percentage error (MAPE)
5.3%
< Required 1
Required 2 >
Transcribed Image Text:Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours 1 $ 2,620 1,710 2 2,780 1,790 3 2,930 1,870 4 3,040 1,890 5 3,120 1,920 6 3,090 1,900 7 3,030 1,880 8 2,870 1,860 9 2,640 1,720 10 2,240 1,120 11 2,250 1,320 12 2,470 1,610 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. O Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final answer as a percentage rounded to 1 decimal place (i.e., 0.054 = 5.4%). Include any outliers in your calculations.) Mean absolute percentage error (MAPE) 5.3% < Required 1 Required 2 >
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education