Adriana Corporation manufactures football equipment. Simple regression results from the data of Adriana Corporation are as follows: Equation: Overhead = $217,610 + ($88.61 × Labor-hours) Statistical data Correlation coefficient 0.610 R2 0.372 Required: Estimate overhead if the company expects the plant to operate at a monthly average of 3,000 labor-hours next year. Overhead costs

Adriana Corporation manufactures football equipment. Simple regression results from the data of Adriana Corporation are as follows: Equation: Overhead = $217,610 + ($88.61 × Labor-hours) Statistical data Correlation coefficient 0.610 R2 0.372 Required: Estimate overhead if the company expects the plant to operate at a monthly average of 3,000 labor-hours next year. Overhead costs

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 8EA: Using the information in the previous exercises about Marleys Manufacturing, determine the operating...

See similar textbooks

Similar questions

Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow: Maintenance Machine Month Cost Hours $ 4,200 Jan. 480 Feb. 3,000 320 Mar. 3,600 400 Apr. 2,820 300 May 4,350 500 June 2,960 310 July 3,030 320 Aug. 4,470 520 Sept. 4,260 490 Oct. 4,050 470 Nov. 3,300 350 Dec. 3,160 340 Sum $43, 200 4,800 $ 3,600 $ $ $ 684.65 Average 400 Average cost per hour a (intercept) b (coefficient) 9.00 7.2884 Standard error of the estimate 34.469 R-squared 0.99724 t-value for b 60.105 At 400 hours of activity, Armer management can be approximately two-thirds confident that the maintenance costs will be in the range of
Meargia Plastics is evaluating its plastic bottles division. The accounting manager has come up with the following data for the year: contribution margin of $570,000, controllable fixed of $228,000, and noncontrollable fixed costs of $57,000. Required: 1. What is the controllable margin? Controllable Margin 2. What is the total contribution by profit center (CPC)?
An auditor uses regression analysis to evaluate relationship between utility cost and machine hours. The following information is available based from monthly cost and machine hours of the company:· Intercept: 3,000 · Regression is .90· Correlation coefficient is .80· SD error 2,000· No of observations: 1,000What is the expected annual utility cost of the company if it has 150 machines, and it will use 5,000 hours for next year?
Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month Machine Hours Electricity Costs January 2,500 $ 18,400 February 2,900 21,000 March 1,900 13,500 April 3,100 23,000 May 3,800 28,250 June 3,300 22,000 July 4,100 24,750 August 3,500 22,750 September 2,000 15,500 October 3,700 26,000 November 4,700 31,000 December 4,200 27,750 Summary Output Regression Statistics Multiple R 0.965 R Square 0.932 Adjusted R2 0.925 Standard Error 1,425.18 Observations 12.00 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 3,726.88 1,682.82 2.21 0.05 (22.69) 7,476.45 Machine Hours 5.77 0.49 11.7 0.00 4.67 6.87 The percent of the total variance that can be explained by the regression is:…
A company has a linear total cost function and has determined that over the next three months it can produce12,000 units at a total cost of $224; 000. This same manufacturer can produce 18,000 units at a total cost of$296; 000. The selling price per unit is $13.25.i. Determine the revenue, cost and prot functions using q for number of units.ii. What is the xed cost ?iii. What is the marginal cost ?iv. Find the break-even quantity.v. What is the break-even dollar volume of sale ?vi. What will prot be if the company shuts down operation?vii. If, because of a strike, the company will be able to produce only 10,000 units, should it shut down for the nextthree months ? why or why not ?
Fiske Corporation manufactures a popular regional brand of kitchen utensils. Results from a regression of factory costs on labor-hours using the data of Fiske Corporation are as follows: Equation: Overhead = $1,401,352 + ($134.90 x Labor-hours) Statistical data Correlation coefficient 0.963 0.928 R² Required: Managers expect the plant to operate at 19,500 labor-hours next quarter. Assuming the relationship remains the same with the new product line and using the results from this regression, what are the estimated quarterly factory costs? Estimated quarterly factory costs
XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr), and the third is based on quantity produced (Q). The results were: [Y=$95,000 + $9×DLH; R-square = 0.90]; [Y= $120,000 + $5xMhr; R-square = 0.10]; [Y=190,000+2Q; R-square=0.55]. How much of the variations on the overhead costs is explained by %3D the machine hours (Mhr)? Select one: a. 55% b. None of the answers given c. 90% d. 45%
XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr). and the third is based on quantity produced (Q). The results were: [Y=$95,000 + $9×DLH; R-square 0.90]; [Y= $120,000 + $5xMhr; R-square 0.10]: [Y=D190,000+2Q; R-square%3D0.55]. How much of the variations on the overhead costs is explained by the direct labor hours (DLH)? Select one: Oa 45% Ob. None of the answers given O c 10% O a. 5596 Ce. 90%,
XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr). and the third is based on quantity produced (Q). The results were: [Y-$150,000 + $10×DLH; R-square 0.95]: [Y= $190,000 $5xMhr. R-square = 0.11] [Y=200,000+20 R-square=0.52] Based on this information, %3D which cost driver do you recommend? Select one: O a. All cost drivers are the same Ob. None of them Oc Machine hours (Mhr) O d. Direct labor hours (DLH) Oe. Quantity produced (Q)
Meargia Plastics is evaluating its plastic bottles division. The accounting manager has come upwith the following data for the year: contribution margin of $500,000, controllable fixed costs of$200,000, and noncontrollable fixed costs of $50,000.What is the controllable margin and total contribution by profit center (CPC)?a. Controllable margin: $200,000; CPC: $50,000b. Controllable margin: $50,000; CPC: $500,000c. Controllable margin: $250,000; CPC: 300,000d. Controllable margin: $300,000; CPC: $250,000
Using the least-squares method of analyzing costs, answer the following questions and show computations to support your answers. a. What is the estimated variable portion of maintenance costs per labor hour? B.What is the estimated fixed maintenance cost each month? C.Formulate the regression equation D.If it is estimated that 600 labor hours will be used in July, what is the expected total power cost for July?
Various financial data for the past two years follow. Output: Sales Input: Labor Raw materials Last year This year Energy Capital Other Last year This year LAST YEAR $200,150 31,105 35,005 4,900 45,500 1,900 THIS YEAR $201, 150 a. Calculate the total productivity measure for this company for both years. Note: Round your answers to 2 decimal places. Total Productivity Labor 41,105 44,800 4,900 48,750 3,100 b. Calculate the partial productivity measures for labor, capital, and raw materials for this company for both years. Note: Round your answers to 2 decimal places. Capital Raw Materials