Cost Estimation, High-Low Method; MAPE Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine-hours. These data are from the previous fiscal year for maintenance expense and machine-hours:
Month | Maintenance Expense | Machine-Hours |
1 | $2,600 | 1,690 |
2 | 2,760 | 1,770 |
3 | 2,910 | 1,850 |
4 | 3,020 | 1,870 |
5 | 3,100 | 1,900 |
6 | 3,070 | 1,880 |
7 | 3,010 | 1,860 |
8 | 2,850 | 1,840 |
9 | 2,620 | 1,700 |
10 | 2,220 | 1,100 |
11 | 2,230 | 1,300 |
12 | 2,450 | 1,590 |
Required
1. What is the cost equation for maintenance cost using the high-low method?
2. Calculate MAPE for the cost equation you developed in part 1.
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