Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Ethan Manufacturing Incorporated 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 costs and machine hours:
Month
Maintenance Costs
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 costs using the high-low method?
2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
