The management of Wheeler Company has decided to develop cost formulas for its major overhead activities. Wheeler uses a highly automated manufacturing process, and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed; thus, they must be broken into their fixed and variable elements so that the cost behavior of the power usage activity can be properly described. Machine hours have been selected as the activity driver for power costs. The following data for the past eight quarters have been collected: [pic]

.:.
For the following requirements, round the fixed cost to the nearest dollar and round the variable rates to the nearest cent. Required:
1. Prepare a scattergraph by plotting power costs against machine hours. Does the scattergraph show a linear relationship between machine hours and power cost? 2. Using the high and low points, compute a power cost formula. 3. Use the method of least squares to compute a power cost formula. Evaluate the coefficient of determination. 4. Rerun the regression, and drop the point (20,000, $26,000) as an outlier. Compare the results from this regression to those for the regression in Requirement 3. Which is better?

SOLUTION:

1.

[pic]

The overall relationship looks reasonably linear—although the data point for the first quarter may be an outlier.

...is the results if the process was centered at 166. Table 3 shows the findings;
Parameter Value Results Value
Upper tolerance limit 170 Process capability index 1.3333 The actual process capability is Cpk = 1.333
Lower tolerance limit 162 Upper one sided index 1.3333 The potential process capability is Cp = 1.333
Mean (optional) 166 Lower one sided index 1.3333
Standard deviation 1
Table 3 illustrates an almost...

...Problem Set 3
Macroeconomics, ECON 2123
Sections L3 and L4 P. Sen
Posted 9.11.14.
Due 5 PM 17.11.14.
-----------------------------------------------------------------------------------------------------------------------------------
100 marks total
Part I: True/False/Uncertain Please justify your answer with a short argument for each
question and draw a diagram if necessary. (25 marks, 5 marks each: 2 marks for correct
judgment and 3 marks for...

...Week 3 individual assignment
Comprehensive problem 67
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken’s modified adjusted gross income for purposes of the bond interest exclusion and for determining the taxability of his Social Security benefits is $70,000 and that Ken files as a single...

...constraints are:
On Sales:
Per acre production
Total Production
Maximum Sales
Wheat
50 bushels
110,000
Alfalfa
1.5 tons
1800
Barley
2.2 tons
2200
Constraints:
Thus mathematical model is:
Maximize:
Subject to:
Solving the problem using solver of MS Excel we get the solution as follows:
Variable
Solution
547.21
544.90
422.71
311.34
373.84
65.52
65.52
0.00
Variable
Max. Profit
Solution
0.00
0.00
586.66
376.95
35.33...

...Review Problems#3
Question-1
Mark Goldsmith's broker has shown him two bonds. Each has a maturity of 5 years, a par value of $1,000, and a yield to maturity of 12%. Bond A has a coupon interest rate of 6% paid annually. Bond B has a coupon interest rate of 14% paid annually.
a. Calculate the selling price for each of the bonds.
ANSWER:
b. Mark has $20,000 to invest. Judging on the basis of the price of the bonds, how many of either one could Mark...

...ECON 213
PROBLEM SET 3
Name: ___Krystal Logsdon_____________________________________
Problem Set 3 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 6.
1. Data for the market for graham crackers is shown below. Calculate the elasticity of
demand between the following prices.
Price of
crackers
Quantity Demanded (per month)
$3
80
$2.5
120
$2
160
$1.5
200
$1
240
$1.00 - $1.50:...

...Problem Set 3
Name: Lauren Hensley
Problem Set 3 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 6.
1. Data for the market for graham crackers is shown below. Calculate the elasticity of demand between the following prices.
Price of crackers
Quantity Demanded (per month)
$3
80
$2.5
120
$2
160
$1.5
200
$1
240
$1.00 - $1.50: -0.333
$1.50 - $2.00: -0.6
$2.00 - $2.50: -1
$2.50 - $3.00:...

...Problem set 3 (Answer)
7.6. A farmer uses three inputs to produce vegetables: land, capital, and labor. The production function for the farm exhibits diminishing marginal rate of technical substitution.
a) In the short run the amount of land is fixed. Suppose the prices of capital and labor both increase by 5 percent. What happens to the cost-minimizing quantities of labor and capital for a given output level? Remember that there are three inputs, one of which...