From the above data, estimate the maintenance costs for the month of July
2011 assuming the output was 1200 units
b)
Calculate the correlation coefficient for the costs with the machine hours
and the costs with the number of units
c)
Draw a scattergraph of the above data
d)
Explain why the actual costs for the month of July might be different from
your estimate.
Question 10
Fixed costs:
‘000 lek
Cost of motor Car
1600
Trade in price after 2 years
240
Maintenance/service
 every 6 months
10
Vehicle license – per annum
13
Variable costs:
Petrol  per litre
160
(Average miles per litre – 10 miles)
Other variable costs – per mile
15
Required
a)
From the above data prepare a schedule to be presented to a prospective
taxi driver showing the

total variable cost and variable cost per mile

total fixed cost, and fixed cost per mile

total cost and total cost per mile
for 5,000 miles, 10,000 miles, 15,000 miles and 30,000 miles p.a.
b)
The more miles you travel, the cheaper it becomes. Comment briefly on this
statement
Question 11
A company manufactures and sells clothes.
You are required to identify the costs into
one of the following eight categories.
You've reached the end of your free preview.
Want to read all 4 pages?
 Fall '19
 Prime cost