METHODS TO SEGMENT SEMIVAR COSTS

NOMBRE:
Enrollment
NAME OF THE
EVIDENCE OF
LEARNING Methods for segmenting semi-variable costs
DELIVERY DATE 13 de Marzo de 2022
MODULE NAME Administrative Accounting V1
ADVISOR NAME Maria del Carmen Jordón Gallegos

Instructions:
1. Read the case presented to you next, apply the methods to segment the semi-variable costs.
Case
The management of the Galván & Uribe Automotive Workshop, Co. wants to know the fixed and variable components of the costs.
you support developing the methodology to segment semi-variable costs
Observe the data from the last six months:

DATA
HOURS TOTAL COST
9 $800.00
20 $1,200.00
15 $950.00
12 $900.00
18 $1,050.00
20 $1,250.00

Table 1. Financial data of the last six months of the Galván Automotive Workshop
2. In an Excel document include the following:
Cover. Provide your identification details: full name, registration number, name of the Module and of the U
Learning, name of the advisor, delivery date.
-Header of each section. This must be centered, with different letters (bold or italic)
empresa, nombre del método que desarrollas (recuerda que son tres los solicitados).
Development.
Do what is mentioned below:
1. Using the high-low method, determine the total cost of the repair department.
2. Using the least squares method (statistical method), calculate the total cost of the department.
3. Applying the scatter plot method:
1. Determine if there is a linear relationship between the total repair cost and the number of hours spent and
2. Calculate the total cost of the repair department considering that the manager has determined
Hours at $1,150) is the one that best describes the relationship between cost and hours worked.
-Conclusion. Compare the results obtained with each method and clearly and succinctly argue which one

DEVELOPMENT

1.- Using the high point - low point method, determine the total cost of the department of rep.

Total cost of the repair department of the Galvan & Uribe Automotive Workshop, CO. If 16 hours are worked.
low

Total Costs Hours

high point $1,250.00 20
low point $800.00 9
$450.00 11

Variable Rate $450/11 = 40.9090909090909

Variable Cost

Total cost Hours

$1,250.00 20

20 x $40.9 = 818.18

Where:
CF = Fixed Cost
CV= Costo Variable
CT= Costo Total
 FC = TI - CV
FC = $1,250-818 = $431.82

Total cost if 16 hours are worked = $431.82 + (40.90)(16) = $1,086.36

2. Using the least squares method (statistical method), calculate the total cost of the department.

Least squares method.

Instructions: Calculate the total cost of the repair department if it gets stuck.
Galvan & Uribe Automotive Workshop CO. Least Squares Methods

y = a + bX
Observations Total de Costos (y) Hours (x) x2
1 $800.00 9 81
2 $900.00 12 144
3 $950.00 15 225
4 $1,050.00 18 324
5 $1,200.00 20 400
6 $1,250.00 20 400
Summation $6,150.00 94 1574

b= 6 ($100,150.00) - ($94.00) ($6,150.00) = $600,900.00 - $578,100.00 =

6 ($1574.00) - ($8,836.00) = $9,444.00 - $8,836.00 =

a = ($6,150.00) ($8,836.00) ($94.00)($100,150.00) = $54,341,400.00 - $9, 414,100.00 =

6 ($1,574.00) - $8,836.00 = $9,444.00 - $8,836 =

y = $73,893.59 + ($37.50) (16) = $600.00

Therefore, we conclude that if 16 hours are worked, the cost would be $600.00.

3. Applying the scatter plot method:

a) Determine if there is a linear relationship between the total repair cost and the number of hours spent.
b) Calculate the total cost of the repair department taking into account that the manager has determined
hours at $1,150) is the one that best describes the relationship between the cost and the hours worked.
 Galván & Uribe Automotive Workshop Co.
Cost Segmentation Method of Scatter Plot

DATA
HOURS TOTAL COST
9 $800.00
20 $1,200.00
15 $950.00
12 $900.00
16
18 $1,050.00
20 $1,250.00

a) Determine if there is a linear relationship between the total repair cost and the number of hours spent.

SCATTER DIAGRAM
$1,400.00

$1,200.00

$1,000.00

$800.00

$600.00

$400.00

$200.00

$0.00
8 10 12 14 16 18
HOURS

As we can see, there is a linear relationship in how the cost increases as the hours increase.

b) Calculate the total cost of the repair department taking into account that the manager has determined
hours at $1,150) is the one that best describes the relationship between cost and hours worked.

HOURS TOTAL COSTS

18 $1,050.00
20 $1,200.00
Costo Varible = Cost 2 - Cost 1 = y 2 -y
Volume 2 - Volume 1 X2

Costo Variable = $1,200 - $1050 150 = $75.00 Variable Cost per hour
20-18 2

Total Cost = Fixed Cost + Variable Cost

$1,050.00 = y1 + $75 (18)

$1,050.00 = y1 + $1,350.00
$1,050.00 . $1,350.00 = y1
$300 =y1

Where $300 is the fixed cost for 18 hours

$1,200.00 = y1 + $75 (20)

$1,200.00 = y1 + $1,500.00
$1200.00 - $1,500.00 = y1
$300 = y1

Therefore, for the range of 18 to 20 hours, the Variable Unit Cost is $75 and the Fixed Cost is $300.00.

CONCLUSIONS

I believe there is a slight difference when applying the different methods, but they are minimal, the method q
square segmentation because I feel it uses more precise elements since the operations are more co
and correctly determine the results based on specific calculations.
VARIABLES

and carry out the calculations that are indicated to you.

parts from the repair department. You

tables.

& Uribe, Co.

Unit, title of the Evidence of

a) and in which you add the name of the

if 16 hours are worked.

of repair if 16 hours are worked.

and present it in a graph.

oh, that the point (18 hours at $1,050) and (20

it's better and why.

comparison if you work 16 hours.

using the high point-low point method

x hours machine
to repair if worked 16 hours.

at 4 PM.
os

xy
$7,200.00
$10,800.00
$14,250.00
$18,900.00
$24,000.00
$25,000.00
$100,150.00

$22,800.00 $37.50
$608.00

$44,927,300.00 $73,893.59
$608.00

and represent it in a graph.

from, that the point (18 hours at $1,050) and (20
and represent it in a graph.

8 20 22

employees.

from, that the point (18 hours at $1,050) and (20

a

what convinces me the most is that of

complex and therefore makes us analyze