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In: Accounting

Month Machine Hours (hrs.) Maintenance Costs ($) 1 1,330 102,694 2 1,400 103,694 3 1,500 108,694...

Month Machine Hours (hrs.) Maintenance Costs ($)
1 1,330 102,694
2 1,400 103,694
3 1,500 108,694
4 1,470 108,694
5 1,620 116,694
6 1,690 115,694
7 1,490 107,694
8 1,310 102,694
9 1,450 106,694
10 1,580 113,694
11 1,300 100,694
12 1,600 113,694
13 1,650 114,694
14 1,440 109,694
15 1,340 102,694
16 1,670 114,694
17 1,480 106,694
18 1,360 103,694
19 1,340 103,694
20 1,540 112,694
Assume that the following relationship holds:
Maintenance Costs = (v * Machine Hours) + f
REQUIRED
Estimate the values of v and f and the cost equation, using,
1. the High-Low Method, and

2. the Linear Regression method.

Note, to use the linear regression method, you MUST use the Microsoft excel program.

Make sure to report:

1. the values of v and f;
2. a scatter plot of the data points, and
3. the adjusted R-square; explain what the adjusted R-square means.

4. The cost equation in the form of Y = vx + f, substituting the values for v and f from the regression output.

YOUR SUBMISSION MUST BE IN EXCEL. ONE WORKBOOK, WITH A WORKSHEET FOR EACH ANALYSIS (i.e., High-Low Method and Regression Analysis respectively). The regression analysis must include the output from the Analysis Datapak similar to Exhibit 6-15 on page 328.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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