An important application of regression analysis in accounting is in the estimation of cost. By collecting...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 400 4,300 450 5,300 550 5,700 600 6,200 700 750 6,700 7,300 a. Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. Do not round intermediate calculations. Compute by and bp (to 1 decimal). Do not round intermediate calculations. bi bo Complete the estimated regression equation (to 1 decimal). Do not round intermediate calculations. + b. What is the variable cost per unit produced (to 2 decimal)? Do not round intermediate calculations. $ c. Compute the coefficient of determination (to 3 decimals). Do not round intermediate calculations. Note: report between 0 and 1. What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? Do not round intermediate calculations. % d. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)? Do not round intermediate calculations. $ An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 400 4,300 450 5,300 550 5,700 600 6,200 700 750 6,700 7,300 a. Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. Do not round intermediate calculations. Compute by and bp (to 1 decimal). Do not round intermediate calculations. bi bo Complete the estimated regression equation (to 1 decimal). Do not round intermediate calculations. + b. What is the variable cost per unit produced (to 2 decimal)? Do not round intermediate calculations. $ c. Compute the coefficient of determination (to 3 decimals). Do not round intermediate calculations. Note: report between 0 and 1. What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? Do not round intermediate calculations. % d. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)? Do not round intermediate calculations. $
Expert Answer:
Posted Date:
Students also viewed these mathematics questions
-
You have extracted a trial balance and drawn up accounts for the year ended 31 December 20X7. There was a shortage of 78 on the credit side of the trial balance, a suspense account being opened for...
-
The FOMC statement of December 12, 2012, indicated that the target range for the federal funds rate would continue at least until the rate of unemployment falls below 6 percent or the projected rate...
-
The company reported the following information for the year: Ending work-in-process inventory . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . $100,000 Depreciation on...
-
How does a performance report differ from a comparative income statement?
-
Capacity and product mix decisions, linear programming Xu Company makes two types of wood doors: standard and deluxe. The doors are manufactured in a plant consisting of three departments: cutting,...
-
Spiller Corporation plans to issue 8%, 5-year, $500,000 par value bonds payable that pay interest semiannually on June 30 and December 31. The bonds are dated January 1 of the current year and are...
-
How do emotions, attitudes, motivation, goals, and stress impact organizational behavior in criminal justice organizations? What is a situational example?
-
1. Since medical assistants are often patients' first contact with the facility and the provider, what attributes must medical assistants possess? 2. Name six administrative duties of the medical...
-
Carson is accepted for a 20/10 balloon mortgage at 4.27%. If Carson finances $235,750, how much will his balloon payment be?
-
After you've completed this week's assigned reading, watch the video below. Next, respond to the Discussion questions underneath. Your first post should answer those questions and should be made by...
-
Netflix is a subscription - based streaming service that allows our members to watch TV shows and movies on an internet - connected device. Depending on your plan, you can also download TV shows and...
-
What are the challenges associated with vaccine development, particularly in designing immunogens that elicit protective immune responses while minimizing adverse reactions or potential escape...
-
Homebase is a specialist manufacturer of different types of wall tiles; ceramic and stone. Homebase excavates blocks of granite from its quarry from its joint processes of quarry and cutting. Two...
-
A stock has had returns of 8 percent, 26 percent, 14 percent, 17 percent, 31 percent, and 1 percent over the last six years. What are the arithmetic and geometric average returns for the stock?
Study smarter with the SolutionInn App