Roger Co. implemented activity-based costing in the current year. To select the appropriate driver for Cost Pool A, Roger performed regression analyses for two independent variables, Driver 1 and Driver 2, using monthly operating data. The monthly levels of Cost Pool A were the dependent variables in both regressions. Output results from the regression analyses were as follows:

                          Driver 1          Driver 2

R squared                0.46         0.80

Intercept               $551.00       $970.00

X variable (slope) $ 0.55           $ 0.33

At the budgeted production level for next month, the levels of Driver 1 and Driver 2 are expected to be 5,880 and 7,000, respectively. 

Based on this information, what is the budgeted amount for Cost Pool A for next month?

Answer rating: 100% (QA)

To calculate the budgeted amount for Cost Pool A for next month we need to use the regression analys... View the full answer