Newport, Inc. used Excel to run a least-squares regression analysis, which resulted in the following output: Regression Statistics Multiple R R Square Observations 0.7225 0.8500 30 Coefficients 31,000 Standard Error T Stat P-Value 2.86 3,493 0.4640 0.021 Intercept Production (X) 5.87 14.30 0.000 a. What is Newport's total fixed cost? Total Fixed Cost b. What is Newport's variable cost per unit? (Round your intermediate calculations to 2 decimal places.) Variable Cost per unit c. What total cost would Newport predict for a month in which they sold 5,000 units? Total Costs
Newport, Inc. used Excel to run a least-squares regression analysis, which resulted in the following output: Regression Statistics Multiple R R Square Observations 0.7225 0.8500 30 Coefficients 31,000 Standard Error T Stat P-Value 2.86 3,493 0.4640 0.021 Intercept Production (X) 5.87 14.30 0.000 a. What is Newport's total fixed cost? Total Fixed Cost b. What is Newport's variable cost per unit? (Round your intermediate calculations to 2 decimal places.) Variable Cost per unit c. What total cost would Newport predict for a month in which they sold 5,000 units? Total Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Newport, Inc. used Excel to run a least-squares regression analysis, which resulted in the following output:
Regression Statistics
Multiple R
R Square
Observations
0.7225
0.8500
30
Coefficients
Standard Error
T Stat
P-Value
0.021
Intercept
Production (X)
31,000
5.87
3,493
2.86
0.4640
14.30
0.000
a. What is Newport's total fixed cost?
Total Fixed Cost
b. What is Newport's variable cost per unit? (Round your intermediate calculations to 2 decimal places.)
Variable Cost
per unit
c. What total cost would Newport predict for a month in which they sold 5,000 units?
Total Costs
d. What proportion of variation in Newport's cost is explained by variation in production? (Round your intermediate calculations to 2
decimal places.)
Proportion of Variation
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