7 points Barb Harris, the controller of Mowen Co., is developing a cost formula for its...
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7 points Barb Harris, the controller of Mowen Co., is developing a cost formula for its packing activity. The formula will be used to estimate future packing costs. Discussion with the workers in the packing department has revealed that packing costs are associated with number of customer orders and weight of the orders. She gathered data from the most recent 15 months and run a multiple regression of packing costs on two independent variables: number of orders and weight of orders. She obtained the following regression printout: Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations Intercept Number of orders Weight of orders (in pounds) 0.9890 0.9782 0.9759 8038,0411 15 Coefficients 881.6190 1.8780 0.9242 Standard Error 2808.9494 0,4168 0.1669 f-star 0.3139 4.5057 5.5379 p-value 0.7590 0.0007 0.0001 Required: 1. (4 points) Determine the cost equation from the regression outputs. Be sure to define the dependent variable (Y) and the independent variables (Xs). 2. (3 points) Using the equation, predict the total packing cost for 25,000 orders, weighing 40,000 pounds. Provide an estimate for the total packaging cost. 7 points Barb Harris, the controller of Mowen Co., is developing a cost formula for its packing activity. The formula will be used to estimate future packing costs. Discussion with the workers in the packing department has revealed that packing costs are associated with number of customer orders and weight of the orders. She gathered data from the most recent 15 months and run a multiple regression of packing costs on two independent variables: number of orders and weight of orders. She obtained the following regression printout: Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations Intercept Number of orders Weight of orders (in pounds) 0.9890 0.9782 0.9759 8038,0411 15 Coefficients 881.6190 1.8780 0.9242 Standard Error 2808.9494 0,4168 0.1669 f-star 0.3139 4.5057 5.5379 p-value 0.7590 0.0007 0.0001 Required: 1. (4 points) Determine the cost equation from the regression outputs. Be sure to define the dependent variable (Y) and the independent variables (Xs). 2. (3 points) Using the equation, predict the total packing cost for 25,000 orders, weighing 40,000 pounds. Provide an estimate for the total packaging cost.
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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