Point Products produces field hockey balls, which are packaged in cases. The balls are produced in a single plant. Because of the nature of the production process at Point Products, overhead includes all labor costs. Data on production output (in cases) and total overhead costs (in thousands of dollars) from the past 15 months follow:
Using the data given, the cost analyst at Point Products ran a regression analysis of overhead costs on number of cases, with the following results:
At the same time, the cost analyst, working with the plant manager, started an account analysis of the individual overhead accounts. They estimated a fixed cost per month of $22,600 and a variable cost per case of $80. Required a. Based on the results of the regression analysis, what are the estimated fixed costs per month and variable cost per case at Point Products? b. Based on the results of the regression analysis, what would be the estimated overhead costs for a month in which 5,000 cases were produced? c. Based on the results of the account analysis, what would be the estimated overhead costs for a month in which 5,000 cases were produced?