Business Analytics (2nd Edition)
Business Analytics (2nd Edition)
2nd Edition
ISBN: 9780321997821
Author: James R. Evans
Publisher: PEARSON
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Chapter 3, Problem 18PE

In the Purchase Orders database, conduct a Pareto anaIysis of the Cost per order data. What conclusions can you reach?

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Sleep Late, a large hotel chain, has been using activity-based costing to determine the cost of a night’s stay at their hotels. One of the activities, “Inspection,” occurs after a customer has checked out of a hotel room. Sleep Late inspects every 10th room and has been using “number of rooms inspected” as the cost driver for inspection costs. A significant component of inspection costs is the cost of the supplies used in each inspection Mary Adams, the chief inspector, is wondering whether inspection labor-hours might be a better cost driver for inspection costs. Mary gathers information for weekly inspection costs, rooms inspected, and inspection labor-hours as follows: Q.Plot the data and regression line for rooms inspected and inspection costs. Plot the data and regression line for inspection labor-hours and inspection costs. Which cost driver of inspection costs would you choose? Explain.
Identify several types of manufacturing companies for which process costing would be an appropriate product-costing system. What characteristics do the products of these companies have that would make process costing a good choice? How is process costing similar and different in a second or later processing department?
The amount of income spent on housing is an important component of the cost of living. The total costs of housing for homeowners might include mortgage payments, property taxes, and utility costs (water, heat, electricity). An economist selected a sample of 20 homeowners in New England and then calculated these total housing costs as a percent of monthly income, 5 years ago and now. The information is reported below. Is it reasonable to conclude the percent is less now than 5 years ago?   Homeowner Five Years Ago   Now   Homeowner   Five Years Ago   Now 1   17 %     10 %     11       35 %     32 % 2   20       39       12       16       32   3   29       37       13       23       21   4   43       27       14       33       12   5   36       12       15       44       40   6   43       41       16       44       42   7   45       24       17       28       22   8   19       26       18       29       19   9   49       28       19       39       35   10   49…

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Business Analytics (2nd Edition)

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