# Question

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?

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?

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