Following are the direct labor hours and the repair costs of Jason Corporation over a seven week period.
|
Direct Labor Hours |
Repair Costs |
|
(00 omitted) |
(00 omitted) |
|
40 hours |
$60 |
|
45 |
80 |
|
30 |
60 |
|
50 |
80 |
|
60 |
100 |
|
40 |
70 |
|
20 |
50 |
|
285 hours |
$500 |
1. Separate the repair costs into the fixed and variable components by using (a)the high low
method and (b)the method of least squares.
2. Compute the coefficient of determination.
3. Comment on the choice of direct labor hours in explaining the repair costs.