Tempe Office Services and Supplies (TOSS) provides various products and services in the Tempe Research Park, home to numerous high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a egression analysis of data from the Color Copy Department with the following results: Intercept R-squared Number of observations X coefficient Month July August September October November December Number of Color Copies 25,900 23,000 The regression output was based on the following data: 19,550 18,150 30.874686 0.970922 22,150 20,400 6 0.081144 Color Copy Department Costs $ 2,095 1,955 1,600 1,475 1,815 1,725 Required: . What is the variable cost per color copy for TOSS? 2. What is the fixed cost for the Color Copy Department? 3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department? Enter answer as an equation in the form of y = a + bx. 5-a. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. 5-b. What cost formula should be used based on your analysis? Enter answer as an equation in the form of y= a + bx. 5. If 22,800 copies are made during January, what is the total cost predicted by each method?
Tempe Office Services and Supplies (TOSS) provides various products and services in the Tempe Research Park, home to numerous high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a egression analysis of data from the Color Copy Department with the following results: Intercept R-squared Number of observations X coefficient Month July August September October November December Number of Color Copies 25,900 23,000 The regression output was based on the following data: 19,550 18,150 30.874686 0.970922 22,150 20,400 6 0.081144 Color Copy Department Costs $ 2,095 1,955 1,600 1,475 1,815 1,725 Required: . What is the variable cost per color copy for TOSS? 2. What is the fixed cost for the Color Copy Department? 3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department? Enter answer as an equation in the form of y = a + bx. 5-a. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. 5-b. What cost formula should be used based on your analysis? Enter answer as an equation in the form of y= a + bx. 5. If 22,800 copies are made during January, what is the total cost predicted by each method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tempe Office Services and Supplies (TOSS) provides various products and services in the Tempe Research Park, home to numerous
high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a
regression analysis of data from the Color Copy Department with the following results:
Intercept
R-squared
Number of observations
X coefficient
Month
July
August
September
October
November
December
The regression output was based on the following data:
Color Copy
Department
Costs
Number of
Color
Copies
25,900
23,000
19,550
18, 150
30.874686
0.970922
22,150
20,400
6
0.081144
$ 2,095
1,955
1,600
1,475
1,815
1,725
Required:
1. What is the variable cost per color copy for TOSS?
2. What is the fixed cost for the Color Copy Department?
3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the
Color Copy Department? Enter answer as an equation in the form of y= a + bx.
5-a. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department.
5-b. What cost formula should be used based on your analysis? Enter answer as an equation in the form of y= a + bx.
6. If 22,800 copies are made during January, what is the total cost predicted by each method?
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