The controller of Standard Industries has collected the following monthly expense data for analyzing the cost behavior

Question:

The controller of Standard Industries has collected the following monthly expense data for analyzing the cost behavior of electricity costs.

Instructions

a. Determine the fixed- and variable-cost components using regression analysis (We recommend the use of Excel.)

b. Prepare a scatter plot using Excel. Present the cost equation line estimated in part (a).

c. What electricity cost does the cost equation estimate for a level of activity of 500 machine hours? By what amount

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Related Book For answer-question

Financial and Managerial Accounting

ISBN: 978-1119392132

3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: Feb 13, 2020 01:12 PM

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The controller of Standard Industries has collected the following monthly expense data for analyzing the cost behavior

Question:

Total Electricity Costs Total Machine Hours $2,500 January 300 February 3,000 350 March 3,600 500 April 4,500 690 May 3,200 400 June 4,900 700 July 4,100 650 August 3,800 520 September 5,100 680 October 4,200 630 November 3,300 350 December 6,100 720

Step by Step Answer:

a Using Excel regression analysis the intercept and slope are Intercept fixed costs 850468 Slo...View the full answer

Financial and Managerial Accounting

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