Question

In: Statistics and Probability

25. An important application of regression in manufacturing is the estimation of cost of production. Based...

25. An important application of regression in manufacturing is the estimation of cost of production. Based on DATA from Ajax Widgets relating cost (Y) to volume (X), what is the cost of producing 600 widgets?

Production Volume (units)

Total Cost $

400

3430

450

4080

550

4878

600

4884

700

5913

750

6402

425

4273

475

4362

575

5089

625

5446

725

6017

775

6591

Solutions

Expert Solution

Solution:

Given: cost (Y) and Production volume (X)

We have to find the cost of producing 600 widgets by using given data.

Thus we need to find regression equation to predict Y = Cost from X= Production volume.

where

Thus we need to make following table:

X : Production Volume (units) Y : Total Cost $ X^2 XY
400 3430 160000 1372000
450 4080 202500 1836000
550 4878 302500 2682900
600 4884 360000 2930400
700 5913 490000 4139100
750 6402 562500 4801500
425 4273 180625 1816025
475 4362 225625 2071950
575 5089 330625 2926175
625 5446 390625 3403750
725 6017 525625 4362325
775 6591 600625 5108025

Thus

Thus

and

Thus

Thus regression equation is:

Thus the cost of producing 600 widgets is:

orchestra answered 1 year ago
Next > < Previous

Related Solutions

An important application of regression in manufacturing is the estimation of cost of production. Based on...
An important application of regression in manufacturing is the estimation of cost of production. Based on DATA (see chart below) from Ajax Widgets relating cost (Y) to volume (X), what is the cost per widget? A: 8.75 B. 7.54 C: None of the answers are correct D: 8.21 E. 7.38 Production volume (units) Total cost ($) 400 450 550 600 700 750 425 475 575 625 725 775 5424 5657 5759 7294 7583 8603 5311 6093 6662 7380 7784 8588
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. In the Microsoft Excel Online file below you will find a sample of production volumes and total cost data for a manufacturing operation. Conduct a regression analysis to explore the relationship...
An important application of regression analysis in accounting is in the estimation of cost. By collecting...
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT