Jonathan Macintosh Penn Orchardman - 24127

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  • From: Business,
  • Posted on: Wed 04 Sep, 2013
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Request Description

Jonathan Macintosh is a highly successful Pennsylvania orchardman who has formed his own company

 

to produce and package applesauce. Apples can be stored for several months in cold storage, so applesauce

 

production is relatively uniform throughout the year. The recently hired controller for the firm is

 

about to apply the high-low method in estimating the company’s energy cost behavior. The following

 

costs were incurred during the past 12 months:

 

Month Pints of Applesauce Produced Energy Cost

 

January ................................................................ 35,000 .............................................. $23,400

 

February ............................................................... 21,000 .............................................. 22,100

 

March .................................................................. 22,000 .............................................. 22,000

 

April ..................................................................... 24,000 .............................................. 22,450

 

May ..................................................................... 30,000 .............................................. 22,900

 

June .................................................................... 32,000 .............................................. 23,350

 

July ...................................................................... 40,000 .............................................. 28,000

 

August ................................................................. 30,000 .............................................. 22,800

 

September ............................................................ 30,000 .............................................. 23,000

 

October ................................................................ 28,000 .............................................. 22,700

 

November ............................................................. 41,000 .............................................. 24,100

 

December ............................................................ 39,000 .............................................. 24,950

 

Required:

 

1. Use the high-low method to estimate the company’s energy cost behavior and express it in

 

equation f orm.

 

2. Predict the energy cost for a month in which 26,000 pints of applesauce are produced.

Solution Description

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jonathan_macintosh_penn_orchardman.docx
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