Talon Services offers standardized job counseling services. The company is planning a new service line targeted to active seniors whoare retiring and looking forward to a new career. The service will sell for a flat $971 per client and will consist of a standardizedoffering. The service will consist of a total of 9 hours with a counseling specialist and a battery of tests to assess interests andaptitudes. Counseling specialists, who are contract employees, are paid $34 per hour. The testing is estimated to cost $131 per client.Administrative costs for the new service have not been estimated, but the company has collected Information on counseling hours andadministrative costs for other services over the past 15 months. The following is a summary of a simple regression of administrativecosts on counseling hours:Simple Regression Analysis ResultsDependent variable-Administrative costa (monthly)Independent variable-Counseling hours (monthly)Computed valuesInterceptCoefficient on independent variableCoefficient of correlation$ 76,100$10.400.8900.752Required:a. What percentage of the variation in administrative costs is explained by the independent variable?89.0%75.2%97.6%54.1%Some other amount

Administrative Cost-Administrative Costs also referred to as administrative costs, are a company's…

Answered: Required: a. What percentage of the…

Required: a. What percentage of the variation in administrative costs is explained by the independent variable? 89.0% 75.2% 97.6% 54.1% Some other amount

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Talon Services offers standardized job counseling services. The company is planning a new service line targeted to active seniors who
are retiring and looking forward to a new career. The service will sell for a flat $971 per client and will consist of a standardized
offering. The service will consist of a total of 9 hours with a counseling specialist and a battery of tests to assess interests and
aptitudes. Counseling specialists, who are contract employees, are paid $34 per hour. The testing is estimated to cost $131 per client.
Administrative costs for the new service have not been estimated, but the company has collected Information on counseling hours and
administrative costs for other services over the past 15 months. The following is a summary of a simple regression of administrative
costs on counseling hours:
Simple Regression Analysis Results
Dependent variable-Administrative costa (monthly)
Independent variable-Counseling hours (monthly)
Computed values
Intercept
Coefficient on independent variable
Coefficient of correlation
$ 76,100
$10.40
0.890
0.752
Required:
a. What percentage of the variation in administrative costs is explained by the independent variable?
89.0%
75.2%
97.6%
54.1%
Some other amount

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