Purchase Solution

Cost estimation

Not what you're looking for?

Ask Custom Question

SomethingNew is a small one-person company that provides elaborate and imaginative wedding cakes to order for very large wedding receptions. The owner of the company would like to understand the cost structure of the company and has compiled the following records of activity and costs incurred. The owner believes that the number of weddings catered is the best measure of activity.

Month
Weddings
Costs Incurred

January
3
$3,800

February
2
$3,600

March
6
$4,000

April
9
$4,300

May
12
$4,500

June
20
$5,200

Required:

a. Using the high-low method, estimate the variable cost per wedding and the total fixed cost per month. (Round off the variable cost per wedding to the nearest cent and the total fixed cost to the nearest dollar.)

b. Using the least-squares regression method, estimate the variable cost per wedding and the total fixed cost per month. (Round off the variable cost per wedding to the nearest cent and the total fixed cost to the nearest dollar.)

c. What would be the estimated costs if the company anticipates catering 18 weddings in July?

Purchase this Solution
Solution Summary

Excel file shows cost estimation using high-low method and the least-squares regression method.

Purchase this Solution
Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Operations Management

This quiz tests a student's knowledge about Operations Management

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Method for Reliable Cost Estimation

    127485 Cost Estimation 2. Of the 2 approaches (below) to cost estimation, which in your view likely produces the most reliable estimates?

  • Cost Estimation Models and Methodologies

    Parametric Cost Estimation: In this cost estimation method, managers fix some technical parameters for the project in order to estimate the actual cost.

  • project cost estimation

    199866 project cost estimation Discuss the methodology your company uses for project cost estimation. The methodology followed by my company for project cost estimation is using experts for estimating project costs.

  • Problems with measuring cost

    The solution discusses what types of problems may arise when measuring cost for short-run cost estimation.

  • Cost estimation method

    221337 Cost estimation method Which cost estimation method do you think is the most accurate? Why? Which cost estimation method do you think is the most accurate? Why?

  • High-low method of cost estimation

    222353 High-low method of cost estimation 1. The three most common cost behavior classifications are _________.

  • Cost-Estimate and Multiple Regression

    17622 Cost estimation & multiple regression Cost estimation and using multiple regression: University Hospital has prepared a schedule of estimated overhead costs for its blood test unit for the coming year on the assumption that production will be 80,000

  • Profit Estimation of Tax

    The one problem with using economic profit is that it could be fairly hard to value one's opportunity cost. Profit estimation is examines for tax.

  • Cost Estimation Techniques

    One of the cost estimation technique is High -Low method.

  • Inductive and Deductive Reasoning - Differences and Examples

    Estimation example from our daily lives: Suppose you are preparing budget for a party then you will estimate the number of guests, cost of decoration, cost of eatables, number of gifts etc. to arrive at a budget.

View More Related Solutions