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).
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:Required information
EX 6-34 (Algo) 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.
Month
January
February
March
April
May
June
Total Hours of Total Utility
Operation
450
600
800
400
350
300
EX 6-34 (Algo) Part 1: The utility costs for one of the company's stores are listed below...
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).
Req 1A
Cost
$ 2,520
3,100
3,900
2,400
2,050
1,900
Complete this question by entering your answers in the tabs below.
Req 1B
Req 3A
Req 3B
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.
Note: Round the intercept to the nearest whole number and the slope to two decimal places.
Monthly utility cost =
X
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