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Requirement 1. The computer in May's office is down, and May has been asked to immediately provide an equation to estimate the future purcha cost equation. What equation does she get? Purchase costs (y) = $ 1,041 + ( 4 X Quantity purchased (X) ) Requirement 2. Using the equation from requirement 1, calculate the future expected purchase costs for each of the last 3 months of the year. Month October Purchase Quantity Expected 3,340 parts November 3,710 parts December 3,040 parts High-Low Method Expected Cost E S 14,401 $ 15,881 13,201 Requirement 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationshi May obtains is as follows: y = $2,582.6+ 3.54 Run a regression on the 9 months of data u Regression Statistics R Square t Stat X Variable 1 Requirements 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationship between the quantity purchased and purchase costs of part #696. The regression line May obtains is as follows: y= $2,582.6+ 3.54X Evaluate the regression line using the criteria of economic plausibility, goodness of fit, and significance of the independent variable. Compare the regression equation to the equation based on the high-low method. Which is a better fit? Why? 4. Use the regression results to calculate the expected purchase costs for October, November, and December. Compare the expected purchase costs to the expected purchase costs calculated using the high-low method in requirement 2. Comment on your results. Month Cost of Purchase Quantity Purchased January February $ 12,675 2,710 parts 13,000 2,810 March 17,653 4,153 April 15,825 3,756 May 13,125 2,912 June 13,814 3,387 July 15,300 3,622 August 10,233 2,298 September 14,950 3,562 - ☑ Print Done Month October Purchase Quantity Expected 3,340 parts November 3,710 December 3,040

Requirement 1. The computer in May's office is down, and May has been asked to immediately provide an equation to estimate the future purcha cost equation. What equation does she get? Purchase costs (y) = $ 1,041 + ( 4 X Quantity purchased (X) ) Requirement 2. Using the equation from requirement 1, calculate the future expected purchase costs for each of the last 3 months of the year. Month October Purchase Quantity Expected 3,340 parts November 3,710 parts December 3,040 parts High-Low Method Expected Cost E S 14,401 $ 15,881 13,201 Requirement 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationshi May obtains is as follows: y = $2,582.6+ 3.54 Run a regression on the 9 months of data u Regression Statistics R Square t Stat X Variable 1 Requirements 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationship between the quantity purchased and purchase costs of part #696. The regression line May obtains is as follows: y= $2,582.6+ 3.54X Evaluate the regression line using the criteria of economic plausibility, goodness of fit, and significance of the independent variable. Compare the regression equation to the equation based on the high-low method. Which is a better fit? Why? 4. Use the regression results to calculate the expected purchase costs for October, November, and December. Compare the expected purchase costs to the expected purchase costs calculated using the high-low method in requirement 2. Comment on your results. Month Cost of Purchase Quantity Purchased January February $ 12,675 2,710 parts 13,000 2,810 March 17,653 4,153 April 15,825 3,756 May 13,125 2,912 June 13,814 3,387 July 15,300 3,622 August 10,233 2,298 September 14,950 3,562 - ☑ Print Done Month October Purchase Quantity Expected 3,340 parts November 3,710 December 3,040

FINANCIAL ACCOUNTING
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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Requirement 1. The computer in May's office is down, and May has been asked to immediately provide an equation to estimate the future purcha cost equation. What equation does she get? Purchase costs (y) = $ 1,041 + ( 4 X Quantity purchased (X) ) Requirement 2. Using the equation from requirement 1, calculate the future expected purchase costs for each of the last 3 months of the year. Month October Purchase Quantity Expected 3,340 parts November 3,710 parts December 3,040 parts High-Low Method Expected Cost E S 14,401 $ 15,881 13,201 Requirement 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationshi May obtains is as follows: y = $2,582.6+ 3.54 Run a regression on the 9 months of data u Regression Statistics R Square t Stat X Variable 1 Requirements 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationship between the quantity purchased and purchase costs of part #696. The regression line May obtains is as follows: y= $2,582.6+ 3.54X Evaluate the regression line using the criteria of economic plausibility, goodness of fit, and significance of the independent variable. Compare the regression equation to the equation based on the high-low method. Which is a better fit? Why? 4. Use the regression results to calculate the expected purchase costs for October, November, and December. Compare the expected purchase costs to the expected purchase costs calculated using the high-low method in requirement 2. Comment on your results. Month Cost of Purchase Quantity Purchased January February $ 12,675 2,710 parts 13,000 2,810 March 17,653 4,153 April 15,825 3,756 May 13,125 2,912 June 13,814 3,387 July 15,300 3,622 August 10,233 2,298 September 14,950 3,562 - ☑ Print Done Month October Purchase Quantity Expected 3,340 parts November 3,710 December 3,040
Transcribed Image Text:Requirement 1. The computer in May's office is down, and May has been asked to immediately provide an equation to estimate the future purcha cost equation. What equation does she get? Purchase costs (y) = $ 1,041 + ( 4 X Quantity purchased (X) ) Requirement 2. Using the equation from requirement 1, calculate the future expected purchase costs for each of the last 3 months of the year. Month October Purchase Quantity Expected 3,340 parts November 3,710 parts December 3,040 parts High-Low Method Expected Cost E S 14,401 $ 15,881 13,201 Requirement 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationshi May obtains is as follows: y = $2,582.6+ 3.54 Run a regression on the 9 months of data u Regression Statistics R Square t Stat X Variable 1 Requirements 3. After a few hours May's computer is fixed. May uses the first 9 months of data and regression analysis to estimate the relationship between the quantity purchased and purchase costs of part #696. The regression line May obtains is as follows: y= $2,582.6+ 3.54X Evaluate the regression line using the criteria of economic plausibility, goodness of fit, and significance of the independent variable. Compare the regression equation to the equation based on the high-low method. Which is a better fit? Why? 4. Use the regression results to calculate the expected purchase costs for October, November, and December. Compare the expected purchase costs to the expected purchase costs calculated using the high-low method in requirement 2. Comment on your results. Month Cost of Purchase Quantity Purchased January February $ 12,675 2,710 parts 13,000 2,810 March 17,653 4,153 April 15,825 3,756 May 13,125 2,912 June 13,814 3,387 July 15,300 3,622 August 10,233 2,298 September 14,950 3,562 - ☑ Print Done Month October Purchase Quantity Expected 3,340 parts November 3,710 December 3,040
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