QUESTION 3 21 MARKS Beetroots (Pty) Ltd is a company that buys fresh veggies in bulk,...

QUESTION 3 21 MARKS Beetroots (Pty) Ltd is a company that buys fresh veggies in bulk, and sells it direct to the public after packaging it in smaller quantities. The following cost data is available for six months: Month Kg Veggies Total cost January 200kg R3,800 February 500kg R8,600 March 900kg R14,300 April 350kg R5,950 May 780kg R12,800 June 800kg R13,200 The Financial Manager is of the opinion that the total cost for the month is related to the quantity of veggies that is packaged (measured in kilograms). REQUIRED: MARKS 3.1 Compile a cost formula (cost function) by making use of the High-Lowmethod. 5 3.2 Compile a cost formula (cost function) by making use of the Least Squares-method (Simple Regression Analysis). Show all calculations. 8 3.3 Explain why there is a difference between the cost formula according to the High-Low-method and the cost formula according to the Least Squares-method, and advise the best method to use. 4 3.4 Calculate the budgeted cost for July and August according to both cost formulas if the expected quantity of veggies that will be packaged is 950kg and 1,020kg respectively. 4

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