8th Edition

ISBN: 9781259917066

Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.

Publisher: Mcgraw-hill Education,

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Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing …

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In compari…

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Textbook Question

Chapter 6.A, Problem 10P

Least-Squares Regression Method; Scattergraph; Cost Behavior L06−1 1

Professor John Morton bas just been appointed chairperson of the Finance Department at Westland University. In reviewing the departments cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms:
Chapter 6.A, Problem 10P, Least-Squares Regression Method; Scattergraph; Cost Behavior L061 1 Professor John Morton bas just

Professor Moron knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course, He would like to have the variable and fixed costs separated for planning purposes.
Required:
1. Prepare a scattergraph plot. (Plot total cost on the vertical axis and number of sections offered on the horizontal axis.)
2. Using the least-squares regression method, estimate the stable cost per section and the total fixed cost per term for Finance 101. Express these estimates in the form Y= a + bx .
3. Assume that because of the small number of sections offered during the Winter Term this war, Professor Morton will have to offer eight sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. Can you see any problem with using the cost formula from (2) above to derive this total cost figure? Explain.

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Chapter 6.A, Problem 9P

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Least-Squares Regression Method; Scattergraph; Cost Behavior Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department’s cost records. Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. Required: 1. Prepare a scattergraph plot. (Plot total cost on the vertical axis and number of sections offered on the horizontal axis.) 2. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. Express these estimates in the form Y = a + bX. 3. Assume that because of the small number of sections offered during the Winter Term this year. Professor Morton will have to offer eight…

The Perize Corporation used regression analysis to predict the annual cost of indirect materials. The results were as follows: Indirect Materials Cost Explained by Units Produced Constant $15,685 Standard error of Y estimate $3,500 r2 0.7832 Number of observations 20 X coefficient(s) 10.25 Standard error of coefficient(s) 2.1876 What is the cost function? Select one: a. Y = $19,185 + $4.48X b. Y = $15,685 + $10.25X c. Y = $12,285 + $10.25X d. Y = $3,500 + $5.15X

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Chapter 6 Solutions

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Solution Summary: The author explains how the company can segregate the aggregate amount of total cost into variable cost and fixed cost.

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