Question

Tempe Office Services and Supplies (TOSS) provides various products and services in the Tempe Research Park, home to numerous high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a regression analysis of data from the Color Copy Department with the following results: 561.22689 0.966478 Intercept R square Number of observations x coefficient 0.05852 The regression output was based on the following data: Number of Color Month Copies July 24,350 August 17,200 September 24,950 October 23, 400 November 21,550 December 18,550 Color Copy Department Costs $1,935 1,550 2,015 1,975 1,645 Required: 1. What is the variable cost per color copy for TOSS? 2. What is the fixed cost for the Color Copy Department? 3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department? Enter answer as an equation in the form of y= a + bx. 5-a. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. 5-b. What cost formula should be used based on your analysis? Enter answer as an equation in the form of y= a + bx. 6. If 21,900 copies are made during January, what is the total cost predicted by each method? X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 5a Req 5b Req 6 Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. (Round your answers to 2 decimal places.) Variable Cost per Color Copy Fixed Cost $ 5.90 S561.23

Answer 1

Ans: O Calcularle Variable cosdt per clor copy for Joss. Ĉ x Coefificient : $0.05852 -5-8 Cents O Cal Cee late fixed Cosd bs the Color Copy depart ment : Irmer apt - $ 56/· 22689. Cost foomula: Y= atbe Total Cost fixed Cost t (varia ble Cost x Namber af Capies) Total Cost : $ 561 +(58.Cents xNumber afcopies) 24950 Hish 2015 17200 1550 Ditference 465 7750

Variable O.06 Fixed $518 Alariable Note: : Dififerenceof colos Copy Deepert mant Coits Diffezence of Namber of Color Copies - $465 $7750 0.06 Fixed Loto ntembaot teropies f Low Number of Color Copy Depaftment 6ost -(colorcopies LoW Numberat X Variable Cost) 1550 $ s0 - ($1720o xo•06) $ 1550 -$ l032 $518 b) Cost bimula Y: atbx Fixed Cot+/variable 6ost x. Numberaf Copi es) To tal Coit : $518+ (6-06 xalamber af Copies)

PaotiCulars Total Coft Regression $720 High-Low ·$496 (Numbr of Copies xX cocfficient Reg re ssion : Dntércept : $561-22689 - (21900 X 0·0 5852) : * #20 Hish- Low : Fixed - (Namber of copies x Varia ble) : $518 - (21900 X 0:06) : $518 - 1314 : - $796