Refer to Cherestal Industries in P6-66B.

Requirements
1. Use Excel regression analysis to determine Cherestal Industries€™ manufacturing overhead
cost equation using DL hours as the cost driver. Comment on the R-square. Estimate MOH costs if Cherestal Industries incurs 25,500 DL hours in January.
2. Use Excel regression analysis to determine Cherestal€™s MOH cost equation using number of units produced as the cost driver. Use all of the data provided. Project total MOH costs if
Cherestal Industries produces 5,200 units. Which cost equation is better€”this one or the one from Question 1? Why?
3. Use Excel regression analysis to determine Cherestal Industries€™ MOH cost equation using number of units produced as the cost driver. This time, remove any potential outliers before performing the regression. How does this affect the R-square? Project total MOH costs if 5,200 units are produced.
4. In which cost equation do you have the most confidence? Why?

Transcribed Image Text:

MOH Manufacturing Direct MOH Cost Overhead Costs Labour Unts Cost per per Unit Month July August.5 September Hours Produced DL Hour Produced $463,000 23,100 3,620 $20.04 $127.90 119.30 102.84 133.14 97.06 132.73 513,000 26,500 4,300 435,000 20,000 4,230 19.36 21.75 21.03 18.73 21.37 November.. December. 562,000 30,000 5,790 438,000 20,500 3,300