Question
In: Statistics and Probability
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.
| Production Volume (units) | Total Cost ($) |
| 400 | 4,400 |
| 450 | 5,400 |
| 550 | 5,800 |
| 600 | 6,300 |
| 700 | 6,800 |
| 750 | 7,400 |
Compute b1 and b0 (to 1 decimal).
Complete the estimated regression equation (to 1 decimal).
y = + x
b. What is the variable cost per unit produced (to
1 decimal)?
c. Compute the coefficient of determination (to 3
decimals). Note: report r2 between 1 and 0 .
What percentage of the variation in total cost can be explained by
the production volume (to 1 decimal)?
%
d. The company's production schedule shows 500
units must be produced next month. What is the estimated total cost
for this operation (to the nearest whole number)?
Solutions
orchestra answered 1 year agoRelated Solutions
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume.
In the Microsoft Excel Online file below you will find a sample
of production volumes and total cost data for a manufacturing
operation. Conduct a regression analysis to explore the
relationship...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
3,700
450
4,700
550
5,100
600
5,600
700
6,100...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,200
450
5,200
550
5,600
600
6,100
700
6,600...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume.
In the Microsoft Excel Online file below you will find a sample
of production volumes and total cost data for a manufacturing
operation. Conduct a regression analysis to explore the
relationship...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume.
In the Microsoft Excel Online file below you will find a sample
of production volumes and total cost data for a manufacturing
operation. Conduct a regression analysis to explore the
relationship...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important
application of regression analysis in accounting is in the
estimation of cost. By collecting data on volume and cost and using
the least squares method to develop an estimated regression
equation relating volume and cost, an accountant can estimate the
cost associated with a particular manufacturing volume. Consider
the following sample of production volumes and total cost data for
a manufacturing operation.
Production Volume
(units)
Total Cost
($)
400
3,500
450
4,500
550
4,900
600
5,400
700
5,900...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,400
450
5,400
550
5,800
600
6,300
700
6,800...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,000
450
5,000
550
5,400
600
5,900
700
6,400...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,200
450
5,200
550
5,600
600
6,100
700
6,600...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,100
450
5,100
550
5,500
600
6,000
700
6,500...
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