Problem 3Ana Lee has just been appointed director of recreation programs forHighland Park, a rapidly growing community in Connecticut. In the past, thecity has sponsored a number of softball leagues in the summer months. Fromthe city's cost records, Ana has found the following total costs associatedwith the softball leagues over the last several years:Number ofLeaguesYearTotal CostP13,0007,00010,50014,00010,0002017..............2018.2201920202021463Each league requires its own paid supervisor and paid umpires as well asprinted schedules and other copy work. Therefore, Ana knows that somevariable costs are associated with the leagues. She would like to know theamount of variable cost per league and the total fixed cost per year associatedwith the softball program. This information would help her for planningpurposes.1. Using the least-squares regression method, compute the variable cost perleague and the total fixed cost per year for the softball program.2. Express the cost data derived in (1) above in the linear equation form Y -a + bx.3. Assume that Ana would like to expand the softball program during thecoming year to involve a total of seven leagues. Compute the expectedtotal cost for the softball program. Can you see any problem with usingthe cost formula from (2) above to derive this total cost figure?4. Prepare a scattergraph, and fit a regression line to the plotted points usingthe cost formula expressed in (2) above.

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1. Using the least-squares regression method, compute the variable cost per league and the total fixed cost per year for the softball program. 2. Express the cost data derived in (1) above in the linear equation form Y- a+ bX. 3. Assume that Ana would like to expand the softball program during the coming year to involve a total of seven leagues. Compute the expected total cost for the softball program. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?

1. Using the least-squares regression method, compute the variable cost per league and the total fixed cost per year for the softball program. 2. Express the cost data derived in (1) above in the linear equation form Y- a+ bX. 3. Assume that Ana would like to expand the softball program during the coming year to involve a total of seven leagues. Compute the expected total cost for the softball program. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 7CE: Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each...

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