Write a cost equation given regression output (Learning Objective 5) A firm wanted to determine the relationship between its monthly operating costs and a potential cost driver The output of a regression analysis showed the following information a Given this output, write the firms monthly cost equation b Should management use this equation to predict monthly operating costs Explain your answer Intercept Coefficient 21,635 b X variable 1 Coefficient 62 53 m R Square 0 2312

The Answer is in the image, click to view ...

Question: Write a cost equation given regression output (Learning Objective 5) A firm wanted to determine the relationship between its monthly operating costs and a potential

Write a cost equation given regression output (Learning Objective 5)

A firm wanted to determine the relationship between its monthly operating costs and a potential cost driver. The output of a regression analysis showed the following information:

Intercept Coefficient = 21,635 b X variable 1 Coefficient = 62.53 m

a. Given this output, write the firm’s monthly cost equation.

b. Should management use this equation to predict monthly operating costs? Explain your answer.

Intercept Coefficient = 21,635 b X variable 1 Coefficient = 62.53 m R-Square 0.2312 =

Step by Step Solution

★★★★★

3.47 Rating (147 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Introduction To Managerial Accounting Questions!

The following balance sheets were prepared for Pam Corporationand Slest Company on January 1, 20X2, Just before they entered Intoa business combination: Item Assets Cash and Receivables InventoryBu...

If y = f (x) = 1/4 x^8 - 1/5 x^5 + 17x, determine whether we can think of x as a function of y (on R). (Be able to explain briey why or why not.) If the answer is Yes, compute dx/dy

Question Content Area Beginning inventory, purchases, and salesdata for tennis rackets are as follows: April 3 Inventory 19 units@ $14 11 Purchase 12 units @ $15 14 Sale 26 units 21 Purchase 12unit 1...

S6-13 Write a cost equation given regression output (Learning Objective 5) An advertising agency wanted to determine the relationship between its monthly operating costs and a potential cost driver,...

S 6 - 1 3 Write a cost equation given regression output ( Learning Objective 5 ) A legal firm wanted to determine the relationship between its monthly operating costs and a potential cost driver,...

Write a cost equation given regression output (Learning Objective 5) A firm wanted to determine the relationship between its monthly operating costs and a potential cost driver. The output of a...

Regression Analysis (Learning Objective 5) \ Refer to Daves Golden Brown Pancake Restaurant in E6-25. 1. Use Microsoft Excel to perform regression analysis on Daves monthly data. Based on the output,...

A legal firm wanted to determine the relationship between its monthly operating costs and a potential cost driver, professional hours. An excerpt from the output of a regression analysis performed...

Alegal firm wanted to determine the relationship between its monthly operating costs and a potential cost driver, professional hours. An excerpt from the output of a regression analysis performed...

You can invest EUR 10000 in one of three different markets: the underlying market, futures and options. You expect the price of the underlying to increase within 3 months. Futures prices are...

Find the current density as a function of distance r from the axis of a radially symmetrical parallel stream of electrons if the magnetic induction inside the stream varies as B = bra, where b and a...

ADDITIONAL PROBLEMS INDEFINITE PERIODS, INCONSISTENT GROWTH $ . 5 0 dividend at the beginning of year 5 This dividend grows at 5 % during years 5 and 6 After that it grows at 2 % forever 8 % discount...

The cost department of G. Smith and Sons, Inc., has established the following standards for manufacturing. ki5 Normal capacity (units). Maximum capacity (units) Standard variable manufacturing cost...

(This exercise is a continuation of Exercise 89; it should be assigned only if Exercise 89 is also assigned.) The manager of the Westfield branch of Security Home Bank has provided the following data...

CD Express, Inc., provides CD duplicating services to software companies. The customer provides a master CD from which CD Express makes copies. An order from a customer can be for a single copy or...

Crane Dental Supply Company issued $ 2 2 6 0 0 0 0 of 5 % , 5 - year bonds at 9 5 , which pay interest annually. Assuming straight - line amortization, what is the total interest cost of the bonds? $...

Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. The last dividend paid was $8. The...

Cullumber Corporation's fiscal year ends on November 3 0 . The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data: On December...