I am trying to answer the last portion of this question number 3 in regards to recommendations?
Student Name: Cory Gill
Student Identification Number: GA1600104
Student Mailing Address: 4306 Drexel Way Atlanta, Georgia 30346
Student E-mail Address: email@example.com
Student Phone Numbers: 404-723-0269 Course Number and Title: MA 610- Management Accounting
Assignment Number and Title: Activity 1/ Discussion Question 1_02
Date of Submission: October 15, 2016 Part A: 3-A1
Support Cost Based on 75% of the cost of materials: (Material Cost x .75= Support Cost)
Sign A Sign B Direct Material Cost $300 $800 Support Cost $225 $600 Support Cost Based on $70 per power tool operation: ($70 x per tool operation= Support Cost)
Sign A Sign B Power Tool Operations 10 2 Support Cost $700 $140 2. Based upon the numbers with the predicting support cost it seems Dogwood Signs is
predicting too much cost for signs that use less power tool operations. In addition, the company
is also predicting too little cost for signs that use more power tool operations. In other words, the
company is more than likely losing out on jobs that require less power tool operations because
the bids are too high. Therefore, Dogwood needs to bid less on these jobs to profit more. Part B: 3-A2
Support Cost Machine Hour High Month= May $22,000 1,700 Low Month= September $18,000 1,300 Difference $4,000 400 Variable cost per machine hour= change in cost divided by change in cost drive
Therefore, 4,000 divided 400 which equals out to be $10.00 per machine hour. Fixed support cost per month= total support cost ?variable support cost
High Point: $22,000 ? ($10.00 x 1700) = $5,000
Low Point: $18,000 ? ($10.00 x 1300) = $5,000 2. The fact is the analysis would not change at all since the high-low method uses the high and
low activity levels to determine the cost function. Furthermore, the new October data for
machine hours does not change either the high or the low levels. 3. At least-square regression analysis gave the following output:
Regression equation: Y= $4,050 + 10.50X
What recommendations would you give the president based on these analyses?
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