ACTG 2P21 S01 June 7 - high low method to estimate. Paul...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ACTG 2P21 S01 7 June 2010 IKM say I was required to make improvements. It does not involve being encouraged to improve. Will definitely be on final. Textbook question 7.56 For the final we should be able to do last days problem in 5 minutes. We will almost always have a variable and fixed POR from now on. How do we estimate fixed and variable OH. The best way is a line by line approach and go out to the market and see how much it should cost and build spoilage in. This is time consuming and you might not have the manpower to do it. The second best method is using an internal forecast based on last years data. Plot our volume of DL hours on the x axis and OH spending in dollars on the y axis. Then estimate what your volume should be and draw a line to represent that. Use the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: high low method to estimate. Paul doesnt like using regression analysis because the data is usually off and using accurate math does not correct bad data. SP $/DLH SQ DLH/box SC $/ box DM1 DM2 DL 0.25 VOH 0.3 $/DLH 0.25 FOH 0.25 2.92 11.68 .25 The high volume for this problem is 12000 DLH/year. The low is 7000 DLH/year The high cost is 62000 $/year and the low cost is $60500 $/year 62000 $per year 60500 $per year = 0.3 $/DLH 12000 DLH per year 7000 DLH per year Realization rate= 480-96 = 0.8 480 Standard quantity DL = 0.2DLHper box (12-60) 0.8 =0.25 DLH/box...
View Full Document

This note was uploaded on 12/12/2010 for the course ACTG 2P21 taught by Professor Scarborough during the Spring '10 term at Brock University, Canada.

Page1 / 2

ACTG 2P21 S01 June 7 - high low method to estimate. Paul...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online