Salter Manufacturing Company produces inventory in a highly automated assembly plant in Fall River, Massachusetts. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first nine months of operations, the following data were collected: Machine$-$hours Kilowatt$-$hours Total Overhead Costs

January $4,5605,424,000$ $$405,600$

February $4,3805,208,000404,160$

March $4,6805,400,000407,040$

April $3,9605,148,000404,160$

May $3,9005,040,000391,200$

June $3,7204,944,000384,000$

July $4,1505,105,000405,900$

August $3,9505,125,000403,950$

September $4,4405,327,000404,700.$ b$.$ Using the same information, run a regression analysis for each to determine their cost function. Which one of the two would you recommend?

Answer rating: 100% (QA)

To determine the cost function for estimating overhead costs we can use regression analysis with the provided data on machinehours and kilowatthours a... View the full answer