Vinubhai Problem 8-49 Cost Estimation; High-Low Method; Regression Analysis [LO 8-3][The following information applies to the questions displayed below.]Lexon Inc. is a large manufacturer of affordable DVD players. Management recently became aware of rising expensesresulting from returns of malfunctioning products. As a starting point for further analysis, Paige Jennings, the controller,wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2019. Therelevant quarterly data for the previous three years follow:2016Quarter2018ReturnExpenses QuarterReturnExpensesReturnExpenses2017Quarter1$ 14,1001$ 14,5001$ 15,000212,700213,600213,900313,000313,200313,700415,400415,800416,500The result of a simple regression analysis using all 12 data points yielded an intercept of $13,301.52 and a coefficient forthe independent variable of $151.05. (R-squared = 0.21, SE = $1,098.82.)Part 22. (Hints available) Looking at the graph you prepared for requirement 1, select two representative data points and calculate thequarterly forecast for 2019 using the high-low method.3. Calculate the quarterly forecasts for 2019 using the results of the regression analysis.Complete this question by entering your answers in the tabs below.Required 2Required 3Calculate the quarterly forecasts for 2019 using the results of the regression analysis. (Do not round intermediatecalculations. Round your final answers to two decimal places.)Regression One2019 QuarterPredictedExpenses12234

The high-low method is the method used to segregate the variable cost and the fixed cost from the…

2. (Hints available) Looking at the graph you prepared for requirement 1, select two representative data points and calculate the quarterly forecast for 2019 using the high-low method. 3. Calculate the quarterly forecasts for 2019 using the results of the regression analysis.

2. (Hints available) Looking at the graph you prepared for requirement 1, select two representative data points and calculate the quarterly forecast for 2019 using the high-low method. 3. Calculate the quarterly forecasts for 2019 using the results of the regression analysis.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 2STP

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