Ch 5 P5-8, p5-14

Ch 5 P5-8, p5-14 - 90 $2,900 Apr 120 $3,300 May 100 $3,000...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Occupancy Custodial Month Days Costs Mar 4000 $7,500 Apr 6500 $8,250 May 8000 $10,500 Jun 10500 $12,000 Jul 12000 $13,500 Aug 9000 $10,750 Sep 7500 $9,750 intercept $3,973 slope $0.77 RSQ 96.23% high correlation Hi/Lo Method : y = A + b(x) Step 1 - Find VC /unit (b) Occ days Elec Cost Hi pt 12000 $13,500 Lo pt 4000 $7,500 Change 8000 $6,000 $0.7500 y (elec cost) = A ( fixed component) + b (VC/unit) Hi pt $13,500 A ( fixed component) + $0.7500 $13,500 A ( fixed component) + $9,000 Solve for A $4,500 Hi/Lo Method Cost Equation: y = $4500 + $0.75(x) y (elec cost) = A ( fixed component) + b (VC/unit) LO pt y = $4,500 + $0.7500 y = $4,500 + $3,000 Solve for y $7,500 3000 400 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Custodial Costs
Background image of page 1

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

View Full DocumentRight Arrow Icon
x (occup days) 12000 x (occup days) 4,000 00 5000 6000 7000 8000 9000 10000 11000 12000 13000 Column C Occupancy Days
Background image of page 2
Scans Utility Month Taken Cost Jan 60 $2,200 Feb 70 $2,600 Mar
Background image of page 3

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

View Full DocumentRight Arrow Icon
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 90 $2,900 Apr 120 $3,300 May 100 $3,000 Jun 130 $3,600 Jul 150 $4,000 Aug 140 $3,600 Sep 110 $3,100 Oct 80 $2,500 intercept $1,171 slope $18.18 RSQ 96.85% high correlation Hi/Lo Method : y = A + b(x) Step 1 - Find VC /unit (b) Scans Utility Cost Hi pt 150 $4,000 Lo pt 60 $2,200 Change 90 $1,800 $20.0000 Step 2 - Substitute value of b into formula & solve for A y (Utility Cost) = A ( fixed component) + b (VC/unit) Hi pt $4,000 A ( fixed component) + $20.0000 $4,000 A ( fixed component) + $3,000 Solve for A $1,000 Hi/Lo Method Cost Equation: y = $1000 + $20.00(x) Step 3 - Test values of b & A by substituting into Lo point formula y (Utility Cost) = A ( fixed component) + b (VC/unit) LO pt y = $1,000 + $20.0000 y = $1,000 + $1,200 Solve for y $2,200 40 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Utility Cost x (SCANS) 150 x (SCANS) 60 60 80 100 120 140 160 Column C ScansTaken...
View Full Document

This note was uploaded on 02/01/2011 for the course ACCT 226 taught by Professor Smith during the Fall '10 term at South Carolina.

Page1 / 4

Ch 5 P5-8, p5-14 - 90 $2,900 Apr 120 $3,300 May 100 $3,000...

This preview shows document pages 1 - 4. Sign up to view the full document.

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