Determine the utility cost equation of company


Response to the following problem:

Tools Are Us Corporation produces toolboxes used by construction professionals and homeowners. The company is concerned that it does not have an understanding of its utility consumption. The company's president, George, has asked the plant manager and cost accountant to work together to get information about their utilities cost. The two of them accumulated the following data for the past 14 months (production volume is presented in units):

                         Production            Utility Cost

January                113,000                 $1,712

February               114,000                1,716

March                    90,000                 1,469

April                     110,000                1,600

May                      112,000                1,698

June                    101,000                  1,691

July                    104,000                    1,700

Required:

A. Use the high/low method to determine the company's utility cost equation. When required, carry the amount out to three decimal places.

B. What would be the expected utility cost of producing 120,000 units? (The relevant range is 85,000 to 125,000 units of production.)

Request for Solution File

Ask an Expert for Answer!!
Cost Accounting: Determine the utility cost equation of company
Reference No:- TGS02084504

Expected delivery within 24 Hours