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Mema Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months. (See the picture for the table) Compute for the: 1. Use the method of Least-Squares to estimate the fixed and variable portion of overhead costs based on machine hours.

Mema Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months. (See the picture for the table) Compute for the: 1. Use the method of Least-Squares to estimate the fixed and variable portion of overhead costs based on machine hours.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Mema Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To check this, they collected the following data for the past 12 months.

(See the picture for the table)

Compute for the:

1. Use the method of Least-Squares to estimate the fixed and variable portion of overhead costs based on machine hours.

Months Machine Hours Overhead Costs P4,500 4225 1 175 2 170 160 4,321 5,250 4,800 5,100 4,450 4 190 5 175 200 7 160 8. 150 4,200 5,475 4,760 4,325 3,975 9. 210 10 180 11 170 12 145
Transcribed Image Text:Months Machine Hours Overhead Costs P4,500 4225 1 175 2 170 160 4,321 5,250 4,800 5,100 4,450 4 190 5 175 200 7 160 8. 150 4,200 5,475 4,760 4,325 3,975 9. 210 10 180 11 170 12 145
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