Total production cost each week in a production department have been measured for the past five...

Total production cost each week in a production department have been measured for the past five weeks as follows:

Week	Units Produced	Total Cost (GH₵)
1	5	20000
2	9	27000
3	4	17000
4	5	19000
5	6	23000

Required:

a. Use linear regression analysis to obtain an estimate of the fixed cost per week and the variable cost of production per unit.

b. Use your results to estimate the total cost in a week when 8 units are produced.

c. Calculate the correlation coefficient and comment on the value of r that you have obtained. (2marks)

d. Estimate a value for fixed costs and variable costs from the same data, using the high/low analysis and use the values that you have obtained to estimate the total costs in a week when 8 units are produced.

Expert Solution

a)
SUMMARY OUTPUT

Regression Statistics
Multiple R	0.97341986
R Square	0.94754623
Adjusted R Square	0.93006164
Standard Error	1031.0495
Observations	5

ANOVA
	df	SS	MS	F	Significance F
Regression	1	57610810.8	57610810.8	54.1932203	0.0051812
Residual	3	3189189.19	1063063.06
Total	4	60800000

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	9756.75676	1621.39638	6.01750249	0.00919699	4596.74984	14916.7637	4596.74984	14916.7637
X Variable 1	1972.97297	268.008555	7.36160447	0.0051812	1120.05014	2825.89581	1120.05014	2825.89581

Fixed Cost	9756.76
Variable cost per unit	1972.97
Y = 9756.76 + 1972.97 X

b)
Total cost in week = 9756.76 + 1972.97 x 8 units	25540.54

c)
Correlation coefficient = Multiple R	0.97
Units produced and total cost relationship is a positive correlation coefficient.

d)
Units Produced	Total Cost (GH₵)
5	20000
9	27000
4	17000
5	19000
6	23000

Variable cost per unit = (Highest Activity Cost - Lowest Activity Cost)/(Highest Activity Units - Lowest Activity Units)
Variable cost per unit = (27000 - 23000)/(9-6)units	$ 1,333.33
Fixed cost = Highest Activity Cost - (Variable Cost Per Units x Highest Activity Units)
Fixed cost = 27000 - (1333.33 x 9 units)	$ 15,000.00
Y = $15000 + $1,333.33 x 8 units	$ 25,666.67

ekkarill92 answered 2 years ago

1. Two independent forecasting methods have been used each week for the past 5 weeks. The...

1. Two independent forecasting methods have been used each week for the past 5 weeks. The forecasts and actual sales are as follows. Week Actual Sales (number of units) Sales Forecasts (number of units) Method 1 Method 2 Five weeks ago 20 18 21 Four weeks ago 19 19 20 Three weeks ago 21 20 19 Two weeks ago 18 19 17 Last week 22 23 22 a. Calculate the Mean Absolute Deviation (MAD) measures for forecasting methods 1 and...

- The average total cost of production a) equals total cost of production multiplied by the...

- The average total cost of production a) equals total cost of production multiplied by the level of output. b) equals total cost of production divided by the level of output. c) equals the explicit cost of production. d) is the extra cost required to produce one more unit. - The law of diminishing marginal returns a) ultimately explains why production displays diseconomies of scale. b) sets in because not all workers are equally productive c) applies only in the...

The total costs incurred in 2019 at various output levels in a factory have been measured...

The total costs incurred in 2019 at various output levels in a factory have been measured as follows: Output (Units) Total Cost ($) 40 1800 70 2,400 80 2,600 100 3,000 160 4,200 When output is 200 units or more, another factory unit must be rented and fixed costs therefore increase by 50%. Variable cost per unit is forecast to rise by 20% at the start of 2020. Required: Using the high-low method and least squares method- a. Calculate the Variable...

Frazier Manufacturing Company collected the following production data for the past month: Units Produced Total Cost...

Frazier Manufacturing Company collected the following production data for the past month: Units Produced Total Cost 1,600 $66,000 1,300 57,000 1,500 67,500 1,100 49,500 If the high-low method is used, what is the monthly total cost equation? A. Total cost = $0 + $45/unit B. Total cost = $13,200 + $33/unit C. Total cost = $16,500 + $30/unit D. Total cost = $9,900 + $36/unit I know the answer is $13,200+33/unit. But I do not see how the math is...

A retailer has been selling 1200 tablet computers a week at $350 each. The marketing department...

A retailer has been selling 1200 tablet computers a week at $350 each. The marketing department estimates that an additional 80 tablets will sell each week for every $10 that the price is lowered. what is p(x) = what price should be set for max revenue If the retailer's weekly cost function is C(x) = 35,000 + 130x what price should it choose in order to maximize its profit?

QUESTION 5 [10 A department has five employees and five jobs have been received which must...

QUESTION 5 [10 A department has five employees and five jobs have been received which must be assigned to the employees for completion. The time (in hours) each person will take to complete each job is given in the table below. Assign the jobs so as to minimize the total number of man-hours required to complete the jobs. Identify the optimal assignments and compute the total minimum time required to complete all jobs. ...

how is (was) productivity measured in your organization. Discuss the concepts of total production, average production and...

how is (was) productivity measured in your organization. Discuss the concepts of total production, average production and marginal production. Relate production to cost and discuss how the ideas of total cost, average cost and marginal cost are used in decision making.

how is (was) productivity measured in your organization? Discuss the concepts of total production, average production,...

how is (was) productivity measured in your organization? Discuss the concepts of total production, average production, and marginal production. Relate production to cost and discuss how the ideas of total cost, average cost, and marginal cost are used in decision making.

Over the past week, I measured the resting heartrates of 24 women ages 30 -50 and...

Over the past week, I measured the resting heartrates of 24 women ages 30 -50 and got the following data measured in beats per minute: 61, 63, 64, 65, 65, 67, 71, 72, 73, 74, 75, 77, 79, 80, 81, 82, 83, 83, 84, 85, 86, 86, 89, 95 My claim is that the variance of heart rates for women ages 30 –50 is different than 12 beats per minute. Is there enough evidence to support my claim? Test at...

What are the total industry sales over the past five years in Entrepreneurship?

Question