XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr), and the third is based on quantity produced (Q). The results were: [Y=$95,000 + $9XDLH; R-square = 0.90]; [Y= $120,000 + $5xMhr; R-square = 0.10]; [Y=190,000+2Q; R-square=0.55]. How much of the variations on the overhead costs is explained by %3D the machine hours (Mhr)? Select one: a. 55% b. None of the answers given c. 90% d. 45%

XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr), and the third is based on quantity produced (Q). The results were: [Y=$95,000 + $9XDLH; R-square = 0.90]; [Y= $120,000 + $5xMhr; R-square = 0.10]; [Y=190,000+2Q; R-square=0.55]. How much of the variations on the overhead costs is explained by %3D the machine hours (Mhr)? Select one: a. 55% b. None of the answers given c. 90% d. 45%

Name: XYZ Company's accountant is estimating nextperiod's total overhead co
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Description: XYZ Company's accountant is estimating nextperiod's total overhead costs (Y). She performedthree regression analyses, the first is based ondirect labor hours (DLH), the second is based onmachine hours (Mhr), and the third is based onquantity produce

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 61P: Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a...

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