Chapter 3 Problems.xlsx

# Chapter 3 Problems.xlsx - 1 H =(1750 13500 L =(850 9000 V =...

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1 H = (1750, 13500) L = (850, 9000) V = Y2-Y1/X2-X1 V = 13500-9000/1750-850 V = \$5/MH y = vx + F y = 5x + F Select L (850, 9000) to Find F 9000 = 5(850) + F F = 4750 y = 5x + 4750 x = Machine Hours 2 New Data (1700, 15800) Analysis will not change because the new data point is between the H and L. 3 y = 3355 + 6.1x Activity Level (MH) 950MH 1200MH 1450MH y = 5x + 4750 9500 10750 12000 y = 6.1x + 3355 9150 10675 12200 6.1x + 3355 = 5x +4750 1.1x = 1395 x = 1268.18182 At this point, I will be indifferent to use either method. As the activity level increases (MH), the regression based support cost function gives a higher cost compared to the H-L cost function since the variable cost per

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