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 ($) |
| 400 | 4,400 |
| 450 | 5,400 |
| 550 | 5,800 |
| 600 | 6,300 |
| 700 | 6,800 |
| 750 | 7,400 |
Compute b1 and b0 (to 1 decimal).
Complete the estimated regression equation (to 1 decimal).
y = + x
b. What is the variable cost per unit produced (to
1 decimal)?
c. Compute the coefficient of determination (to 3
decimals). Note: report r2 between 1 and 0 .
What percentage of the variation in total cost can be explained by
the production volume (to 1 decimal)?
%
d. The company's production schedule shows 500
units must be produced next month. What is the estimated total cost
for this operation (to the nearest whole number)?
In: Statistics and Probability
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
| Production Volume (units) | Total Cost ($) |
| 400 | 4,800 |
| 450 | 5,800 |
| 550 | 6,200 |
| 600 | 6,700 |
| 700 | 7,200 |
| 750 | 7,800 |
In: Economics
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 ($) |
| 400 | 5,000 |
| 450 | 6,000 |
| 550 | 6,400 |
| 600 | 6,900 |
| 700 | 7,400 |
| 750 | 8,000 |
In: Advanced Math
An important application of regression analysis in accounting
is in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
|
In: Statistics and Probability
An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
| Production Volume (units) | Total Cost ($) |
| 400 | 3,900 |
| 450 | 4,900 |
| 550 | 5,300 |
| 600 | 5,800 |
| 700 | 6,300 |
| 750 | 6,900 |
In: Statistics and Probability
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.
|
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In: Statistics and Probability
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 4,900 450 5,900 550 6,300 600 6,800 700 7,300 750 7,900
Compute b1 and b0 (to 1 decimal).
b1 b0 Complete the estimated regression equation (to 1 decimal).y= + x
What is the variable cost per unit produced (to 1 decimal)? $
Compute the coefficient of determination (to 3 decimals).
Note: report r2 between 0 and 1. r2 =
What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? %
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)? $
In: Statistics and Probability
Production volume
400
450
550
600
700
750
Total cost
4000
5000
5400
5900
6400
7000
| 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. Excel File: data12-21.xls
|
In: Statistics and Probability
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 4,900
450 5,900
550 6,300
600 6,800
700 7,300
750 7,900
Compute b1 and b0 (to 1 decimal). b1 b0 Complete the estimated regression equation (to 1 decimal). ŷ = + x
What is the variable cost per unit produced (to 1 decimal)?
Compute the coefficient of determination (to 3 decimals). Note: report r2 between 0 and 1. r2 =
What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? %
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)? $
In: Statistics and Probability
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 $4300
450 $5300
550 $5700
600 $6200
700 $6700
750 $7300
|
In: Statistics and Probability