Bildt-stersund AN wishes to set a flexible budget for its power costs, which are primarily a function

Question:

Bildt-Östersund AN wishes to set a flexible budget for its power costs, which are primarily a function of machine-hours worked. Data for the first four periods follows:

Required

1. Plot the relationship between power costs and machine-hours.

2. Calculate the constant a and slope coefficient b of the function y = a + bX using (i) the high–low approach, and (ii) the regression approach. Comment on the results.

3. For the regression approach, calculate the coefficient of determination, r² . Comment on the result.

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Management And Cost Accounting

ISBN: 9781292232669

7th Edition

Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan

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Question Posted: Oct 25, 2021 03:26 AM

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Bildt-stersund AN wishes to set a flexible budget for its power costs, which are primarily a function

Question:

Period Power costs (Y) Machine-hours (X) 1 SKr 350 200 2 450 300 3 300 100 4 500 400

Step by Step Answer:

To plot the relationship between power costs Y and machinehours X we can create a scatter plot using the provided data Period Power costs Y Machinehours X 1 Skr350 200 2 450 300 3 300 100 4 500 400 Sc...View the full answer

Management And Cost Accounting

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