Conundrum Inc. managers are trying to predict their overhead costs more accurately. In order to...
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Accounting
Conundrum Inc. managers are trying to predict their overhead costs more accurately. In order to do that they have collected data on several potential cost drivers. Use the data to find what you consider to be the best total cost function.
Explain your choice. Include all data you used to make your decision.
Month
Overhead Cost
Direct Labor Hours
Machine Hours
Set Up Hours
Jan
$447,000
100
2,000
4
Feb
$600,000
450
3,000
9
Mar
$392,000
300
1,500
4
Apr
$448,000
700
1,600
8
May
$552,000
500
3,100
5
Jun
$860,000
900
3,200
17
Jul
$397,000
525
1,150
7
Aug
$493,000
800
1,500
9
Sep
$448,000
750
1,300
10
Oct
$530,000
200
1,920
4
Nov
$380,000
400
830
11
Dec
$724,000
600
4,400
18
Jan
$553,000
1,000
2,500
10
Feb
$464,000
1,200
2,400
6
Mar
$520,000
1,175
2,800
12
Apr
$618,000
925
3,750
2
May
$780,000
1,150
4,690
25
Jun
$900,000
1,250
6,000
23
Jul
$664,000
980
4,060
20
Aug
$760,000
1,200
4,200
16
Sep
$560,000
1,000
2,750
8
Oct
$806,000
825
5,170
20
Nov
$705,000
800
3,580
23
Dec
$866,000
1,000
5,500
17
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