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The following information is for the production quantities and total production costs for the past...

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Accounting

The following information is for the production quantities and total production costs for the past three years analysed in quarters:

Year Quarter Production qty Total cost (K'M)

1 1 60 22

2 100 29

311533

410 8

2 1 40 18

2 200 37

3 220 38

4 120 31

3 1 35 12

2 160 80

3 80 26

4 240 ..54

Required

a) Calculate the expected cost (in Kwacha) for year 4 in third quarter where production is estimated to 270 units using the High- low method.

b) Calculate the Pearson correlation coefficient and the coefficient of determination and explain its implication in relation to quantity and cost.

c) Using the least squares method, establish the straight line explaining the relationship between production quantity and total cost, and estimate the expected total cost at production of 115 units.

d) Using a three-quarter moving average, perform an additive model time series analysis on the production quantities and estimate the production quantities for year 4 quarter 3 assuming that the trend grows exponentially from quarter 1 of year 2, onwards

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