Quarter Machine-Hours Utility Costs $215,000 120,000 2 75,000 150,000 200,000 3 110,000 4 150,000 270,000 90,000 170,000 6 140,000 250,000 130,000 225,000 8 100,000 195,000 Estimate the cost function for the quarterly data using the high-low method. Plot and comment on the estimated cost function. Required 1. 2. 3. Mueller anticipates that CELL will operate machines for 125,000 hours in quarter 9. Calculate the pre- dicted utility costs in quarter 9 using the cost function estimated in requirement 1.
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
High-low method. Wayne Mueller, financial analyst at CELL Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours worked and utility costs for the past 8 quarters:
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