Evan Kristopher, the president of Kristopher Company has asked for information about the cost behavior of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is variable. The following data are available: MonthMachine-hoursOverhead Costs February1,700$20,500March2,80022,250April1,00019,950May2,50021,500June3,50023,950 Using the high-low method, determine the overhead cost equation. Use machine-hours as your cost driver.A regression analysis was performed on the same data. The following values were identified: Y- intercept of 18,021.80, R2 of .941 and X-coefficent of 1.569. Prepare the overhead cost equation based on this analysis.What is the significance of the R2 in part b?

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Answered: Using the high-low method, determine…

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ISBN:9781119256830

Author:Amos Gilat

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Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Evan Kristopher, the president of Kristopher Company has asked for information about the cost behavior of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is variable. The following data are available:

Using the high-low method, determine the overhead cost equation. Use machine-hours as your cost driver.
A regression analysis was performed on the same data. The following values were identified: Y- intercept of 18,021.80, R²of .941 and X-coefficent of 1.569. Prepare the overhead cost equation based on this analysis.
What is the significance of the R² in part b?

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