I I I ■ Method of Least Squares, Developing and Using the Cost Formula The method of least squares was used to develop a cost equation to predict the cost of receiving purchased parts at a video game manufacturer. Ninety-six data points from monthly data were used for the regression. The following computer output was received: Intercept Slope The cost driver used was number of parts inspected. Required: 167,100 445 1. What is the cost formula? Total cost of receiving = = $ +($ X 2. Using the cost formula from Requirement 1, identify each of the following: independent variable, dependent variable, Variable rate per professional hour, and fixed cost per month. Independent variable Dependent variable Variable rate per professional hour Fixed cost per month per part inspected 3. Using the cost formula, predict the cost of receiving for a month in which 6,800 parts are inspected. Total cost of receiving = S PES

I I I ■ Method of Least Squares, Developing and Using the Cost Formula The method of least squares was used to develop a cost equation to predict the cost of receiving purchased parts at a video game manufacturer. Ninety-six data points from monthly data were used for the regression. The following computer output was received: Intercept Slope The cost driver used was number of parts inspected. Required: 167,100 445 1. What is the cost formula? Total cost of receiving = = $ +($ X 2. Using the cost formula from Requirement 1, identify each of the following: independent variable, dependent variable, Variable rate per professional hour, and fixed cost per month. Independent variable Dependent variable Variable rate per professional hour Fixed cost per month per part inspected 3. Using the cost formula, predict the cost of receiving for a month in which 6,800 parts are inspected. Total cost of receiving = S PES

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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