An Important application of regresslon 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 regresslon 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. Total Cost ($) Production Volume (units) 400 4,100 450 5,100 550 5,400 600 6,000 700 6,500 750 7,000 (a) Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. (Round your numerical values to two decimal places.) (b) What is the variable cost (in dollars) per unit produced?

An Important application of regresslon 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 regresslon 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. Total Cost ($) Production Volume (units) 400 4,100 450 5,100 550 5,400 600 6,000 700 6,500 750 7,000 (a) Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. (Round your numerical values to two decimal places.) (b) What is the variable cost (in dollars) per unit produced?

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter7: Distance And Approximation

Section7.3: Least Squares Approximation

Problem 31EQ

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