An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Excel file: data14-21.xls Production Volume (units) Total Cost (S) 400 450 4000 5000 5400 550 600 5900 6400 700 750 7000 . Compute bị and bo (to 2 decimals if necessary). b1 bo Complete the estimated regression equation (to 2 decimals if necessary).

An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Excel file: data14-21.xls Production Volume (units) Total Cost (S) 400 450 4000 5000 5400 550 600 5900 6400 700 750 7000 . Compute bị and bo (to 2 decimals if necessary). b1 bo Complete the estimated regression equation (to 2 decimals if necessary).

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4A: Problems In Applying The Linear Regression Model

Section: Chapter Questions

Problem 2E

See similar textbooks

Similar questions

The following information was gathered by the managerial accountant to estimate the 2nd quarter's utility cost: Months Utility Cost Direct labor hours January ₱8,520 1809 February ₱7,628 1421 March ₱5,712 912 April ₱6,746 1102 Summation of X 5,244 Summation of Y 28,606 Summation of XY 38,895,504 Summation of X-squared 7,337,870 Using the regression analysis, what is the estimated cost-function for the 2nd quarter?
Q5. Show that µY = Yµ − µY · 1. Data Mining Regression Evaluation chapter
Least Squaes Regression Below is the production cost of Company B. In the future the company management intends to produce the following number of units: A. 56,500 B. 75,000 Determine the Total Cost of producing A and B based on the historical data below.
A company that manufactures oximeters (devices that are placed on the fingers to measure the amount of oxygenation that a person is producing) has recently been stretched by high demand due to COVID-19. From that company, it is known that in the month of August 2020 a total of 10,000 oximeters were produced that qualified as conforming product, that the company was running a total of 25 days, Monday through Saturday, 9.5 hour shifts, of that time half an hour daily was for calibration and warm-up of the production machines and one hour daily was lunch for the workers. In addition, daily half-hour meetings are held to discuss the day's production. Because they are currently working under pressure due to high demand, there are no kanban waiting times. Determine the parts per hour of work that were produced during the month of August 2020.
Based on honor code, please answer 3 subparts. Bianca runs an online business making and selling Christmas stockings. Over time she has worked out that the cost to make and deliver 3 Christmas stockings is $125, while the cost to make and deliver 7 stockings is $185. The cost to produce each Christmas stocking is the same. Costs involved also include the purchase of the tools to make the stockings. Bianca is interested in exploring the relationship between her profit, costs and selling price. She wants to determine the ‘break-even’ point and look at how this is impacted if the selling price is adjusted. Bianca sells each stocking for $25.a. Write a rule for the amount she would receive (revenue), R dollars, from selling s stockings and sketch its graph on the same axes. b. What are the coordinates of the point where the graphs intersect? c. Profit is defined as revenue – cost: Give a rule for the profit, P dollars, from selling s stockings. Using the equation, find how many stockings…
The technique used in management accounting to determine the change in profit associated with the cost or benefit of the next (or the marginal) unit is called
ABC, Inc., sells tea products to various customers. In recent years, profits have been declining. The CFO of the company investigated the reasons for the profit decline and performed regression analysis for sales and costs. She determined that sales depend on product price, delivery speed, customer services, and marketing expenses. She also determined that total costs consist of variable costs of $25 per unit and fixed costs of $56,000. Marketing expenses have a coefficient of determination of 75% related sales. List two advantages and two limitations of regression analysis.
You estimated the following regression. Source | SS df MS Number of obs = 117 -------------+---------------------------------- F(1, 115) = 0.06 Model | 2523.61281 1 2523.61281 Prob > F = 0.8003 Residual | 4513680.09 115 39249.3921 R-squared = 0.0006 -------------+---------------------------------- Adj R-squared = -0.0081 Total | 4516203.7 116 38932.7906 Root MSE = 198.11 ------------------------------------------------------------------------------ Y | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- X | 40.18036 158.4597 0.25 0.800 -273.6979 354.0586 _cons | -556.9531 11761.12 -0.05 0.962 -23853.48 22739.57 ------------------------------------------------------------------------------…
Ampomah Group is a large is large Ghanaian consumer products company with origin in Nkawkaw in the Eastern Region. The company primarily specializes in Shampoo, Diapers, Baby food and Cold medicine. Ampomah Group has business operations in over 50 cities in Ghana. The Company has been following the economic trends since 2020 and has found that after the COVID-19 pandemic, low income households have been growing two times as quickly as other consumer segments. The preliminary report of the recent 2021 Population and Housing Census indicates a further extension of this trend in the next decade. Low income is defined as families with income at the poverty level or below.Ampomah Group has always had a premium product strategy. It sells its products in grocery stores, convenience stores, mass retailers, etc., but its products are always priced at the high-end of their respective categories. It has never targeted the low income segment before and doesn’t have a low income strategy, but given…
Please provide the correct answer along with the calculation. Do not use ChatGPT, otherwise I will give a downvote.
q22- What is NOT the aspect of sound regression analysis? Select one: a. The effect size that matters economically b. Economic plausibility and significance of the model c. Satisfactory predictive ability of the model d. Reporting only the results that are statistically significant
Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled labour and providestraining to do hand crafting of the goods. In January, they decided to add a fruit bowl to the range. It took 45.60 hours tocomplete the first two fruit bowls. It was found that labour hours reduced as cumulative output increased, and it is expected thatthis trend will continue until 64 fruit bowls have been manufactured. The total number of hours to complete the next two fruitbowls was 41.04 hours. The labour and material costs to manufacture the first four fruit bowls, which have already been sold,were as follows: Direct materials: R1 360 Direct labour: R1 420Additional information: A gift shop owner saw these fruit bowls and has asked for a quotation for 12 to add to its range of products Since the first four fruit bowls were manufactured, the price of material increased by 8%, and the cost of labour by15%. Comfy Limited paid the designer of the fruit bowl R1 600.…