InterceptX Variable 1Coefficients Standard Error39,107.78318109.6489042Multiple Choice21,181.7209614.38397725If the controller uses the high-low method to estimate costs, the cost equation for administrative costs is:Note: Round the variable cost per credit hour to 2 decimal places.Administrative Costs = $47,689.86+ ($103.42 x Credit-hours).Administrative Costs = $21,012.12 + ($111.82 × Credit-hours).Administrative Costs = $201.07 x Credit-hours.Administrative Costs = $52,649.t Stat1.846298677.622989270P-value0.0919076031.03057E-05Lower 95%-7,512.8703377.98998375Upper 95%Lower 95.0%85,728.4367 -7,512.87033141.307825 77.98998375Upper 95.0%85,728.4367141.307825 The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked atclosely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the past thirteen months are shown below:MonthJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarchAprilMayJuneJulyTotalAverageMultiple RR SquareAdjusted R SquareStandard ErrorObservationsANOVAAdministrativeCosts$ 130, 151RegressionResidualTotal83,293226,090216,734258,433185,299219,817245, 510209,802192,095250,828171,098128,677$ 2,517,827$ 193,679SUMMARY OUTPUTRegression StatisticsThe controller's office has analyzed the data and has given you the results from the regression analysis:Credit Hoursdf111121,1005571,8341,4421,7511,5541,7811,8151,5061,5651,80286275718,3261,4100.91696970.8408333740.82636368122,082.1400613SS28,335,634, 1925,363,830,00633,699,464,198MSF28,335,634, 192 - 58.1099654487,620,909.6Significance F1.03057E-05

Cost estimation is important concept used in cost accounting. High low method is a method used for…

Intercept X Variable 1 Coefficients Standard Error 39,107.78318 21,181.72096 109.6489042 14.38397725 Multiple Choice If the controller uses the high-low method to estimate costs, the cost equation for administrative costs is: Note: Round the variable cost per credit hour to 2 decimal places. Administrative Costs = $47,689.86+ ($103.42 x Credit-hours). Administrative Costs $21,012.12 + ($111.82 x Credit-hours). Administrative Costs = $201.07x Credit-hours. t Stat 1.84629867 7.622989270 Administrative Costs = $52,649. Lower 95% P-value 0.091907603 -7,512.87033 1.03057E-05 77.98998375 Upper 95% Lower 95.0% 85,728.4367 -7,512.87033 141.307825 77.98998375 Upper 95.0% 85,728.4367 141.307825

Intercept X Variable 1 Coefficients Standard Error 39,107.78318 21,181.72096 109.6489042 14.38397725 Multiple Choice If the controller uses the high-low method to estimate costs, the cost equation for administrative costs is: Note: Round the variable cost per credit hour to 2 decimal places. Administrative Costs = $47,689.86+ ($103.42 x Credit-hours). Administrative Costs $21,012.12 + ($111.82 x Credit-hours). Administrative Costs = $201.07x Credit-hours. t Stat 1.84629867 7.622989270 Administrative Costs = $52,649. Lower 95% P-value 0.091907603 -7,512.87033 1.03057E-05 77.98998375 Upper 95% Lower 95.0% 85,728.4367 -7,512.87033 141.307825 77.98998375 Upper 95.0% 85,728.4367 141.307825

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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Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its founding, Coram has manufactured its own travel cases. Recently, Holmur Travel Gear (HTG), a local outfitter that manufactures and sells backpacks, tent cases, and so on, contacted Coram and proposed that they produce the headphone travel cases. Based on management experience, Coram's cost per travel case is as follows (based on annual production of 42,000 units). Direct materials $ 10.00 Direct labor 21.20 Variable overhead 6.40 Fixed overhead 4.70 Total $ 42.30 HTG has offered to sell the case to Coram for $39 each. The total order would amount to 42,000 travel cases per year. Coram's management decides that they will make the switch to HTG cases if Coram can save at least $13,000 per year. Accepting the offer would eliminate annual fixed overhead of $79, 800. Required: a. Prepare a schedule that shows the total differential costs. b. Should Coram continue to make the travel cases or…