Yates Corp Required:
(A

question 57

Essay

Yates Corp. wants to develop a cost equation for its administrative costs. The controller believes the appropriate cost driver is units produced. Last year's data are presented below:
$\begin{array}{lcc}\text {Month}&\text {Units Produced}&\text {Administrative Costs}\\\text { January } & 32,500 & \$24,288 \\ \text { February } & 37,700 &27,720 \\ \text { March } & 24,700 &17,820 \\\text { April } & 40,300 &30,360 \\ \text { May } & 49,400 &37,290 \\ \text { June } & 42,900 &29,040 \\\text { July } & 53,300 &32,670 \\ \text { Alugust } & 45,500 &30,030 \\ \text { September } & 26,000 &20,460 \\\text { October } & 48,100 & 34,320\\ \text { November } & 61,100 &40,920 \\ \text { December } & 54,600 &36,630 \\\text { Total } & 516,100&\$361,548 \\ \text { Average } & 43,008 &\$30,129\\\end{array}$
Required:
(a.) What is the equation for administrative costs using the high-low method?
(b.) Prepare an estimate of administrative costs for a month when 30,000 units are produced.

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Definitions:

Subsidiary Entity

A company that is controlled by another company, known as the parent company, typically through ownership of more than half of its voting stock.

Business Combination

Transactions or events that result in the merger of two or more companies, leading to the formation of a single entity.

Non-controlling Interest

A stake in a corporation where the ownership percentage does not grant the holder significant influence over the company’s operations and decisions.

Inventory

Goods or materials that a business holds for the purpose of selling them or turning them into products for sale.