Assignment Part 1
Suppose you have both monthly production data and monthly electricity usage (12 data points).
|Month||Number of days||Table model 1||Table model 2||Total Tables(model 1+model 2)||(1)Drilling electricity usage (kwh)||(2)Other electricity usage (kwh)||(1)+(2)Total electricity usage(kwh)|
To complete the above table make the following assumptions:
Each table needs 30 minutes drilling.
Total number of tables in each month is between 5,000 and 10,000 and not equal to them.
1.Compare rates of two electricity providers and choose the cheapest one based on your electricity usage for a year.
2. Design an Excel file that can be used as a tool for comparing prices of these electricity providers. Provide a brief guide about how this tool works and provide few examples and pictures.
Assignment Part 2
Assume that monthly electricity costs (based on the cheapest electricity provider) and production levels from part 1 are given as past data. Complete this table using the following assumptions:
Raw material cost per table is $20.
Each table requires 2 hours labour work and the labour rate is $17 per hour.
Use number of tables as a cost driver.
The relevant range is between 5,000 and 9,500 tables.
|Month||Total Tables||Total Electricity Cost||Rent||Other expenses||Raw material costs||Labour costs|
1. Use your judgment to classify costs as fixed, variable or mixed. Explain your basis for your classification.
2. Estimate the total cost formula for the organisation using the high-low and regression methods for mixed costs.
3. Estimate the cost of producing 9,000 and 10,500 tables. Explain your results.