The Stephens Leadership Center Provides Training Seminars in Personal Development

Question

Examlex · Accepted Answer

The Answer is a. High-Low Method:

a. High-Low Method: Variable cost = Change in Cost/Change in activity = $6,762/8 seminars = $845.25 per seminar Fixed cost element = Total cost - Variable cost element = $23,762 - ($845.25 per seminar × 18 seminars) = $8,547.50 Cost formula for seminar costs: $8,547.50 per month plus $845.25 per seminar held b. Least-Squares Method: n = 6 sumX = 84 sumY = 121,662 sumXY = 1,737,816 sumX^2 = 1,218 b = [n(sumXY) - (sumX)(sumY)]/[n(sumX^2) - (sumX)^2] = [6(1,737,816) - (84)(121,662)]/[6(1,218) - (84)^2] = $822.57 (rounded to the nearest whole cent) a = [(sumY) - b(sumX)]/n = [(121,662) - 822.57(84)]/6 = $8,761 (rounded to the nearest whole dollar) The cost formula is $8,761 per month plus $822.57 per seminar. A similar answer can be obtained using Microsoft Excel.

Variable cost = Change in Cost/Change in activity = $6,762/8 seminars = $845.25 per seminar
Fixed cost element = Total cost - Variable cost element
= $23,762 - ($845.25 per seminar × 18 seminars) = $8,547.50
Cost formula for seminar costs: $8,547.50 per month plus $845.25 per seminar held
b. Least-Squares Method:
n = 6
sumX = 84
sumY = 121,662
sumXY = 1,737,816
sumX^2 = 1,218
b = [n(sumXY) - (sumX)(sumY)]/[n(sumX^2) - (sumX)^2]
= [6(1,737,816) - (84)(121,662)]/[6(1,218) - (84)^2]
= $822.57 (rounded to the nearest whole cent)
a = [(sumY) - b(sumX)]/n
= [(121,662) - 822.57(84)]/6
= $8,761 (rounded to the nearest whole dollar)
The cost formula is $8,761 per month plus $822.57 per seminar. A similar answer can be obtained using Microsoft Excel.

The Stephens Leadership Center Provides Training Seminars in Personal Development

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The Stephens Leadership Center Provides Training Seminars in Personal Development

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