Jorgenson Corporation has provided the following data for the first five months of the year: January February March April May Machine Hours O 275 345 O 420 335 380 Multiple Choice Using the least-squares regression method of analysis, the estimated variable lubrication cost per machine hour is closest to: $1.85 $1.92 $168 Lubrication Cost $.96 $ 1,535 $1,650 $ 1,765 $ 1,600 $ 1,725

Jorgenson Corporation has provided the following data for the first five months of the year: January February March April May Machine Hours O 275 345 O 420 335 380 Multiple Choice Using the least-squares regression method of analysis, the estimated variable lubrication cost per machine hour is closest to: $1.85 $1.92 $168 Lubrication Cost $.96 $ 1,535 $1,650 $ 1,765 $ 1,600 $ 1,725

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 18E

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Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow: Maintenance Machine Month Cost Hours $ 4,200 Jan. 480 Feb. 3,000 320 Mar. 3,600 400 Apr. 2,820 300 May 4,350 500 June 2,960 310 July 3,030 320 Aug. 4,470 520 Sept. 4,260 490 Oct. 4,050 470 Nov. 3,300 350 Dec. 3,160 340 Sum $43, 200 4,800 $ 3,600 $ $ $ 684.65 Average 400 Average cost per hour a (intercept) b (coefficient) 9.00 7.2884 Standard error of the estimate 34.469 R-squared 0.99724 t-value for b 60.105 At 400 hours of activity, Armer management can be approximately two-thirds confident that the maintenance costs will be in the range of
Q3: The accountant of Manama Corporation has collected the following data on its copy machine costs for the last six months of the year. Month Number of copies Total copy cost July 3,500 $14,000 August 3,200 13,500 September 4,100 16,000 October 5,100 18,000 November 5,600 18,500 December 4,800 17,500 Requirements : 1- Use the regression analysis method to: a- Estimate the cost function (Y= F+vX). b- What percentage of the copy cost depends on number of copies? What portion of the fluctuation is not explained by that cost driver? You need to perform this using Excel. Submit the excel sheet along with your paper. 2- Using the high-low method, calculate the total fixed factory overhead cost and the variable factory overhead cost per direct labour hour and Prepare the cost function. 3. What would the total factory copy cost be at a level of 4,600 copies using each method above? 4. Which prediction method is the best method? Why?
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Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month Machine Hours Electricity Costs January 2,500 $ 18,400 February 2,900 21,000 March 1,900 13,500 April 3,100 23,000 May 3,800 28,250 June 3,300 22,000 July 4,100 24,750 August 3,500 22,750 September 2,000 15,500 October 3,700 26,000 November 4,700 31,000 December 4,200 27,750 Summary Output Regression Statistics Multiple R 0.965 R Square 0.932 Adjusted R2 0.925 Standard Error 1,425.18 Observations 12.00 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 3,726.88 1,682.82 2.21 0.05 (22.69) 7,476.45 Machine Hours 5.77 0.49 11.7 0.00 4.67 6.87 The percent of the total variance that can be explained by the regression is:…
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Data concerning NikNik Corporation's activity for the 6 months appear below: Machine Electrical Cost Hours January P3,120 February 4,460 March 3.500 April 5.040 May 2.900 June 3,200 4.000 6.000 4,800 5.800 3.600 4,200 Using the high-low method of analysis, estimate the variable electrical cost per machine hour (nearest centavo).
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