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 nethod to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing olume. Consider the following sample of production volumes and total cost data for a manufacturing operation. TI Production Volume (units) Total Cost ($) 400 3,600 450 4,600 550 5,000 600 5,500 700 6,000 750 6,600 . Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. Do not round ntermediate calculations. Compute b1 and bo (to 1 decimal). Do not round intermediate calculations. "1 Complete the estimated regression equation (to 1 decimal). Do not round intermediate calculations. . What is the variable cost per unit produced (to 2 decimal)? Do not round intermediate calculations. . Compute the coefficient of determination (to 3 decimals). Do not round intermediate calculations. Note: report r between 0 and 1. Vhat percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? Do not round intermediate calculations. % 1. 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

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Topic Video
Question

14.3 (7)

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
3,600
450
4,600
550
5,000
600
5,500
700
6,000
750
6,600
a. Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. Do not round
intermediate calculations.
Compute b1 and bo (to 1 decimal). Do not round intermediate calculations.
b1
bo
Complete the estimated regression equation (to 1 decimal). Do not round intermediate calculations.
+
b. What is the variable cost per unit produced (to 2 decimal)? Do not round intermediate calculations.
$
c. Compute the coefficient of determination (to 3 decimals). Do not round intermediate calculations. Note: report r between 0 and 1.
What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? Do not round intermediate calculations.
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
Transcribed Image Text: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 3,600 450 4,600 550 5,000 600 5,500 700 6,000 750 6,600 a. Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. Do not round intermediate calculations. Compute b1 and bo (to 1 decimal). Do not round intermediate calculations. b1 bo Complete the estimated regression equation (to 1 decimal). Do not round intermediate calculations. + b. What is the variable cost per unit produced (to 2 decimal)? Do not round intermediate calculations. $ c. Compute the coefficient of determination (to 3 decimals). Do not round intermediate calculations. Note: report r between 0 and 1. What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? Do not round intermediate calculations. 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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Hypothesis Tests and Confidence Intervals for Means
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman