Statistics Assignment

The file

C11_03.xlsx shows the overhead data that

Wagner has collected for its shop for the past

52weeks. The average weekly overhead for the

last 52 weeks is $54,208, and the average weekly

number of labor hours worked is 716. Therefore,

the normalized rate for overhead that will be used

in the upcoming week is about $76(= 54208/716)

per direct labor hour.

Questions

1. Determine whether you can develop a more

accurate estimate of overhead costs.

2. Wagner is now preparing a bid for an important

order that may involve a considerable amount of

repeat business. The estimated requirements for

this project are 15 labor hours, 8 machine hours,

$150 direct labor cost, and $750 direct material

cost. Using the existing approach to cost estimation,

Wagner has estimated the cost for this job

as $2040(= 150 + 750 + (76 × 15)). Given the

existing data, what cost would you estimate for this job?