Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfield's business comes from orders placed by homeowners who are trying to keep neighborho dogs out of their yards. Garfield's operating information for the first six months of the year follows: Month January Operating Cost Number of Bottles Sold 1,020 $ 10,710 February 1,450 15,660 March 1,740 15,900 April 2,350 19,890 May 3,360 27,490 June 3,800 34,800
Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfield's business comes from orders placed by homeowners who are trying to keep neighborho dogs out of their yards. Garfield's operating information for the first six months of the year follows: Month January Operating Cost Number of Bottles Sold 1,020 $ 10,710 February 1,450 15,660 March 1,740 15,900 April 2,350 19,890 May 3,360 27,490 June 3,800 34,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a
spray attachment. The majority of Garfield's business comes from orders placed by homeowners who are trying to keep neighborhood
dogs out of their yards. Garfield's operating information for the first six months of the year follows:
Operating
Cost
Month
January
February
March
April
May
June
Number of
Bottles Sold
1,020
$ 10,710
1,450
15,660
1,740
15,900
2,350
19,890
3,360
27,490
3,800
34,800
Required:
3. Using the high-low method, calculate Garfield's total fixed operating costs and variable operating cost per bottle.
4. Perform a least-squares regression analysis on Garfield's data.
5. Determine how well this regression analysis explains the data.
6. Using the regression output, create a linear cost equation (y= a + bx) for estimating Garfield's operating costs.
Complete this question by entering your answers in the tabs below.
Redetired 3 Required 4 Required 5 Required 6
Using the high-low method, calculate Garfield's total fixed operating costs and variable operating cost per bottle.
Note: Do not round your intermediate calculations. Round your variable cost per unit answer to 2 decimal places and fixed
cost answer to the nearest whole number.
Variable Cost per Unit
$
8.66
Fixed Cost
$
1,877
4. Required 3
Required 4 >
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