United States Motors Incorporated (USMI) manufactures automobiles and light trucks and distributes them for sale to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
United States Motors Incorporated (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 3,400 new vehicles annually: AVERAGE DEALERSHIP FINANCIAL PROFILE Sales Composite Income Statement $ 68,000,000 56,100,000 Cost of goods sold Gross profit Operating costs Variable Mixed Fixed Operating income $ 11,900,000 1,955,000 5,236,000 4,202,400 $ 506,600 USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of the mixed costs to more definitively determine their variability. Required: 1. Calculate the composite dealership profit if 4,850 units are sold. 3. The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $10,200,000. If the projected annual sales for a dealership total $64,600,000, determine the approximate 95% confidence interval for Jack's prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.) Complete this question by entering your answers in the tabs below. Required 1 Required 3 The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $10,200,000. If the projected annual sales for a dealership total $64,600,000, determine the approximate 95% confidence interval for Jack's prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.) Show less United States Motors Incorporated (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 3,400 new vehicles annually: AVERAGE DEALERSHIP FINANCIAL PROFILE Sales Composite Income Statement $ 68,000,000 56,100,000 Cost of goods sold Gross profit Operating costs Variable Mixed Fixed Operating income $ 11,900,000 1,955,000 5,236,000 4,202,400 $ 506,600 USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of the mixed costs to more definitively determine their variability. Required: 1. Calculate the composite dealership profit if 4,850 units are sold. 3. The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $10,200,000. If the projected annual sales for a dealership total $64,600,000, determine the approximate 95% confidence interval for Jack's prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.) Complete this question by entering your answers in the tabs below. Required 1 Required 3 The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $10,200,000. If the projected annual sales for a dealership total $64,600,000, determine the approximate 95% confidence interval for Jack's prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.) Show less
Expert Answer:
Answer rating: 100% (QA)
To determine the approximate 95 confidence interval for Jacks prediction of sales well use the s... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
Below are the 2008 and 2009 year-end balance sheets for Wolken Enterprises: Assets, Liabilities and equity Assets: 2009 2008 Cash $ 200,000 $ 170,000 Accounts receivable 864,000 700,000 Inventories...
-
United States Motors Inc. (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement,...
-
Express the quantity of 3.225 kJ in calories.
-
a. Assume that the takt time is 60 seconds for a cell, but a finishing process has a cycle time of 65 seconds, and there is no way known to reduce that time. What would you do, ideally, and why? b....
-
An object of mass 3.0 kg is allowed to fall from rest under the force of gravity for 3.4 s. What is the change in its momentum? Ignore air resistance.
-
What happens to food while it is in the stomach?
-
(a) What is the level of Jims short-term, one-year disability insurance needs? (b) What is the level of Jims long-term disability insurance needs? (c) Help Jim select from among the important...
-
From these equations, which ones contain like terms a) 2x^2+5 b) -98y+45y c)77-33 +55
-
A selling expense is generally a. completely a fixed cost. b. neither a variable cost nor a fixed cost. c. partly a variable cost and partly a fixed cost. d. completely a variable cost.
-
What determines whether a small open economy will have a trade surplus or a trade deficit?
-
What rule do firms follow to determine how much of each input to hire in order to maximize profits?
-
What determines the amount of investment per worker and capital accumulation in the Solow growth model?
-
How are the effects of changes in domestic saving and investment for large open economies similar to those for small open economies and closed economies?
-
How does total factor productivity differ from labor productivity?
-
You need to write a paper about Industrialization and the Modern State the Creation of a Regulated Economy
-
1. Use these cost, revenue, and probability estimates along with the decision tree to identify the best decision strategy for Trendy's Pies. 2. Suppose that Trendy is concerned about her probability...
-
Find the two eigenvalues of an operator associated with a \(2 \times 2\) matrix with arbitrary elements.
-
Discretize the product of two functions, as compared to discretizing each function independently, and describe what that means in the language of kets.
-
Suppose that the probability of finding some particle 1 at \(x_{1}\) is a Gaussian around \(x_{1}\), with standard deviation \(\sigma_{1}\), and the probability of finding another particle 2 at...
Study smarter with the SolutionInn App