Final answer:
MOH = 240,000 + 8MH indicates a fixed MOH cost of $240,000 and a variable cost of $8 per machine hour. The context provided suggests the firm will use more machines and less labor as wages rise, resulting in fewer hired workers.
Step-by-step explanation:
The student's question about the Mohawk Products regression equation involves understanding the relationship between machine hours (MH) and manufacturing overhead (MOH). The regression equation provided is MOH = 240,000 + 8MH. In this equation, the constant term 240,000 represents the fixed manufacturing overhead cost, which does not change with the level of machine hours. The coefficient 8 represents the variable cost per machine hour. Therefore, for every additional machine hour worked, the manufacturing overhead increases by $8.
The provided context about wages rising to $24 an hour and the firm's incentive to use more machines and less labor illustrates a cost management strategy. The firm is choosing to invest in more physical capital equipment, which can potentially increase productivity per worker but may result in needing fewer workers overall. This aligns with choosing production technology 3, which has the lowest total cost and promotes the use of more machines in place of labor.