relevant quarterly data for the previous three years follow: 2016 Return 2017 Quarter Expenses Quarter Return Expenses 2018 Quarter Return Expenses 1 $14,100 1 $ 14,500 1 $ 15,000 2 12,700 2 13,600 2 13,900 3 13,000 3 13,200 3 13,700 15,400 4 15,800 4 16,500 The result of a simple regression analysis using all 12 data points violded an intere
relevant quarterly data for the previous three years follow: 2016 Return 2017 Quarter Expenses Quarter Return Expenses 2018 Quarter Return Expenses 1 $14,100 1 $ 14,500 1 $ 15,000 2 12,700 2 13,600 2 13,900 3 13,000 3 13,200 3 13,700 15,400 4 15,800 4 16,500 The result of a simple regression analysis using all 12 data points violded an intere
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 8-49 Cost Estimation; High-Low Method; Regression Analysis [LO 8-3]
[The following information applies to the questions displayed below.]
Lexon Inc. is a large manufacturer of affordable DVD players. Management recently became aware of rising expenses
resulting from returns of malfunctioning products. As a starting point for further analysis, Paige Jennings, the controller,
wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2019. The
relevant quarterly data for the previous three years follow:
2016
Quarter
Return
Expenses
2017
Quarter
Return
Expenses Quarter
2018
Return
Expenses
1
$ 14,100
1
$ 14,500
1
$ 15,000
2
12,700
2
13,600
2
13,900
3
13,000
3
13,200
3
13,700
4
15,400
4
15,800
4
16,500
The result of a simple regression analysis using all 12 data points yielded an intercept of $13,301.52 and a coefficient for
the independent variable of $151.05. (R-squared = 0.21, SE = $1,098.82.)
Part 2
2. (Hints available) Looking at the graph you prepared for requirement 1, select two representative data points and calculate the
quarterly forecast for 2019 using the high-low method.
3. Calculate the quarterly forecasts for 2019 using the results of the regression analysis.
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
Looking at the graph you prepared for requirement 1, select two representative data points and calculate the quarterly
forecast for 2019 using the high-low method.
Return
Expenses
2019 Quarter
1
2
3
4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fe73773-b1fa-42c9-9b71-1b383fef5c85%2Fd300fff4-d8ea-46d6-940f-273670aba275%2F73nl94_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 8-49 Cost Estimation; High-Low Method; Regression Analysis [LO 8-3]
[The following information applies to the questions displayed below.]
Lexon Inc. is a large manufacturer of affordable DVD players. Management recently became aware of rising expenses
resulting from returns of malfunctioning products. As a starting point for further analysis, Paige Jennings, the controller,
wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2019. The
relevant quarterly data for the previous three years follow:
2016
Quarter
Return
Expenses
2017
Quarter
Return
Expenses Quarter
2018
Return
Expenses
1
$ 14,100
1
$ 14,500
1
$ 15,000
2
12,700
2
13,600
2
13,900
3
13,000
3
13,200
3
13,700
4
15,400
4
15,800
4
16,500
The result of a simple regression analysis using all 12 data points yielded an intercept of $13,301.52 and a coefficient for
the independent variable of $151.05. (R-squared = 0.21, SE = $1,098.82.)
Part 2
2. (Hints available) Looking at the graph you prepared for requirement 1, select two representative data points and calculate the
quarterly forecast for 2019 using the high-low method.
3. Calculate the quarterly forecasts for 2019 using the results of the regression analysis.
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
Looking at the graph you prepared for requirement 1, select two representative data points and calculate the quarterly
forecast for 2019 using the high-low method.
Return
Expenses
2019 Quarter
1
2
3
4
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