Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority...
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Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie's prints everything from bowling team jerseys to fraternity or sorority apparel to special event shirts, summer league baseball and softball team jerseys are the company's biggest source of revenue. Leslie's manager is trying to determine if number of orders or the number of jerseys printed (or both) is the driver of operating costs. Data for the past year are summarized below: Month January February March April May June July August September October November December Number of Orders 11 12 13 14 20 19 12 10 12 11 10 8 Number of Jerseys 215 210 380 625 750 630 400 350 250 330 200 150 Operating Cost $ 5,500 5,740 5,800 7,200 9,000 9,150 6,000 5,900 4,800 6,010 4,950 4,500 Next month, the company expects to print 400 jerseys and process 16 orders. Required: 1. Run a simple regression with operating cost as the Y variable and number of orders as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? Required: 1. Run a simple regression with operating cost as the Y variable and number of orders as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? 2. Run a simple regression with operating cost as the Y variable and number of jerseys as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per jersey? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? 3. Run a multiple regression with operating cost as the Y variable and number of orders (X1) and number of jerseys (X2). Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. What is the estimate of variable cost per jersey? d. Use the cost equation (with the rounded values) to estimate next month's total operating cost. e. Provide an interpretation of the adjusted R-squared value. f. How much of the variation in total operating cost is unexplained? 4. Which variable(s) would you recommend Leslie's managers use to estimate total operating cost? Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie's prints everything from bowling team jerseys to fraternity or sorority apparel to special event shirts, summer league baseball and softball team jerseys are the company's biggest source of revenue. Leslie's manager is trying to determine if number of orders or the number of jerseys printed (or both) is the driver of operating costs. Data for the past year are summarized below: Month January February March April May June July August September October November December Number of Orders 11 12 13 14 20 19 12 10 12 11 10 8 Number of Jerseys 215 210 380 625 750 630 400 350 250 330 200 150 Operating Cost $ 5,500 5,740 5,800 7,200 9,000 9,150 6,000 5,900 4,800 6,010 4,950 4,500 Next month, the company expects to print 400 jerseys and process 16 orders. Required: 1. Run a simple regression with operating cost as the Y variable and number of orders as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? Required: 1. Run a simple regression with operating cost as the Y variable and number of orders as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? 2. Run a simple regression with operating cost as the Y variable and number of jerseys as the X variable. Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per jersey? c. Use the cost equation (with the rounded values) to estimate next month's total operating cost. d. Provide an interpretation of the R-squared value. e. How much of the variation in total operating cost is unexplained? 3. Run a multiple regression with operating cost as the Y variable and number of orders (X1) and number of jerseys (X2). Answer the following questions: a. What is the estimate of total fixed cost? b. What is the estimate of variable cost per order? c. What is the estimate of variable cost per jersey? d. Use the cost equation (with the rounded values) to estimate next month's total operating cost. e. Provide an interpretation of the adjusted R-squared value. f. How much of the variation in total operating cost is unexplained? 4. Which variable(s) would you recommend Leslie's managers use to estimate total operating cost?
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Here are the results of the regressions 1 Regression with operating cost as Y and number of orders a... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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