Answered: Charlie Corporation's managers in the…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Charlie Corporation's managers in the stamping department have been studying the overhead cost and the relationship with machine hours. The following are data from the most recent 12 months.

Month	Overhead	Machine hours
January	5,030	2,730
February	1,600	600
March	7,210	3,403
April	4,560	2,200
May	6,880	3,411
June	6,520	2,586
July	6,230	3,364
August	5,570	2,411
September	7,728	3,960
October	5,810	2,897
November	4,580	2,207
December	6,010	2,864

The manager of the department has requested a regression analysis of these two variables. The staff person performing the analysis decided to exclude February. She observed the volume of activity was very low for that month because of two factors: a severe flue outbreak and an electrical fire that disrupted operations for about 10 working days.

Required:

c. Using the least square (regression) analysis, compute the fixed cost.

d. Using the least square (regression) analysis, how much are the estimated overheads for 3,000 machine hours?

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