Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six months. Total Hours Total Utility Month of Operation January 400 February 600 March April May June 750 350 300 250 Cost $2,220 3,000 3,600 2,100 1,750 1,600 Required: 1-a. Use the high-low method to estimate the cost behavior for the store's utility costs, Express the cost behavior in formula form (Y = a + bx). 1-b. What is the variable utility cost per hour of operation? 3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form. 3-b. What is the variable utility cost per hour of operation? 4. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each of the cost-estimation methods employed in requirements (1) and (3).
Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six months. Total Hours Total Utility Month of Operation January 400 February 600 March April May June 750 350 300 250 Cost $2,220 3,000 3,600 2,100 1,750 1,600 Required: 1-a. Use the high-low method to estimate the cost behavior for the store's utility costs, Express the cost behavior in formula form (Y = a + bx). 1-b. What is the variable utility cost per hour of operation? 3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form. 3-b. What is the variable utility cost per hour of operation? 4. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each of the cost-estimation methods employed in requirements (1) and (3).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 6-34 Estimating Cost Behavior by Multiple Methods (Appendix) (LO 6-1, 6-2, 6-5, 6-9)
Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to
month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six
months.
Total Hours Total Utility
Month of Operation
January
400
February
600
750
March
April
May
June
350
300
250
Cost
$2,220
3,000
3,600
2,100
1,750
1,600
Required:
1-a. Use the high-low method to estimate the cost behavior for the store's utility costs. Express the cost behavior in formula form (Y= a
+ bx).
1-b. What is the variable utility cost per hour of operation?
3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior
for the store's utility cost. Express the cost behavior in formula form.
3-b. What is the variable utility cost per hour of operation?
4. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each of the cost-estimation methods
employed in requirements (1) and (3).
Complete this question by entering your answers in the tabs below.
Req 18
Req 1A
Req 3A
Req 4
Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost
behavior for the store's utility cost. Express the cost behavior in formula form. (Do not round intermediate calculations.
Round the intercept to the nearest whole number and the slope to two decimal places.)
Monthly utility cost=
Req 3B
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