Reference no: EM132633740

The following data related to Jenel Company's utility costs for the past 6 months are as follows (based on kilowatt hours (kWh)):

kWhs           Total cost ($)

120              4,000

200            6,500

150           4,750

180         5,600

220           7,200

175             5,350

Required:

Question 1: Using high low method, determine the cost formula for utility costs of the company. Determine the variable component per hour and the total fixed cost associated to it.

Question 2: Using your answers on the first requirement, compute for the expected total cost of the company if they projected their kilowatt hours used at 135 hours.

Question 3: Using your answers on the first requirement, how many kWhs will the company expect to use if they budgeted their next month's utility costs at $5,280?

Question 4: Compute the variable and fixed component of the utility costs of Jenel using least squares analysis and derive the cost formula based on your computations.