Question

Tempe Office Services and Supplies (TOSS) provide various products and services in the Tempe Research Park, home to numerous high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a regression analysis of data from the Color Copy Department with the following results:
Intercept .......... 449.26
R square .......... .8225416
Number of observations .... 6
x coefficient ......... .05771

The regression output was based on the following data:


Required:
1. What is the variable cost per color copy for TOSS?
2. What is the fixed cost for the Color Copy Department?
3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department?
4. How accurate will the cost formula developed in requirement 3 be at predicting the total cost for the Color Copy Department?
5. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. What cost formula should be used based on your analysis?
6. If 22,100 copies are made during January, what is the total cost predicted by eachmethod?


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  • CreatedFebruary 27, 2015
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