# Produces blinds and other window treatments for

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Horton Manufacturing Inc. produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm’s profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours 1 \$2,625 1,499 2 2,670 1,590 3 2,720 1,605 4 2,822 1,655 5 2,855 1,775 6 3,005 1,880 7 2,865 1,785 8 2,905 1,805 9 2,780 1,695 10 2,570 1,41011 2,590 1,550 12 2,890 1,425
Required (Round all unit costs to two decimal places) Use the high-low method to estimate the fixed andvariable portions for maintenance costs. Graph the data points to check for possible outliers and determine whether the points selected in requirement 1 are representative of the data. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
9-43CVP Analysis; Commissions; EthicsLionel Corporation manufactures pharmaceutical products sold through a network of sales agents in the United States and Canada. The agents are currently paid an18% commission on sales; that percentage was used when Lionel prepared the following budgeted income statement for the fiscal year ending June 30, 2019: Lionel Corporation Budgeted Income Statement For the Year Ending June 30, 2019 (\$000 omitted) Sales \$28,500 Cost of goods sold Variable\$12,825 Fixed 3,500 16,325 Gross profit \$12,175 Selling and administrative costs Commissions \$ 5,130 Fixed advertising cost 800 Fixed administrative cost 2,150 8,080 Operating income \$ 4,095 Fixed interest cost 705 Income before income taxes \$ 3,390 Income taxes (30%) 1,017 Net income \$ 2,373 Since the completion of the income statement, Lionel has learned that its sales agents