XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr).and the third is based on quantity produced (Q). The results were: [Y-$150,000 + $10×DLH; R-square 0.95]: [Y= $190,000 $5xMhr. R-square = 0.11] [Y=200,000+20 R-square=0.52] Based on this information,%3Dwhich cost driver do you recommend?Select one:O a. All cost drivers are the sameOb. None of themOc Machine hours (Mhr)O d. Direct labor hours (DLH)Oe. Quantity produced (Q)

Name: XYZ Company's accountant is estimating next period's total overhead c
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Description: XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr).and the third is based on quantity pro

Cost driver is any factor which causes a change in the cost of an activity A cost driver is the unit…

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XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH). the second is based on machine hours (Mhr). and the third is based on quantity produced (Q). The results were: [Y-$150,000 + $10XDLH; R-square= 0.95): [Y $190,.000 + $5xMhr. R-square 0.11): [Y=200,000 +2Q R-square 0.52). Based on this information which cost driver do you recommend? Select one: O a All cost drivers are the same O b. None of them Oc Machine hours (Mhr) O d. Direct labor hours (DLH) Oe. Quantity produced (Q)

XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH). the second is based on machine hours (Mhr). and the third is based on quantity produced (Q). The results were: [Y-$150,000 + $10XDLH; R-square= 0.95): [Y $190,.000 + $5xMhr. R-square 0.11): [Y=200,000 +2Q R-square 0.52). Based on this information which cost driver do you recommend? Select one: O a All cost drivers are the same O b. None of them Oc Machine hours (Mhr) O d. Direct labor hours (DLH) Oe. Quantity produced (Q)

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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XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr), and the third is based on quantity produced (Q). The results were: [Y=$95,000 + $9×DLH; R-square = 0.90]; [Y= $120,000 + $5xMhr; R-square = 0.10]; [Y=190,000+2Q; R-square=0.55]. How much of the variations on the overhead costs is explained by %3D the machine hours (Mhr)? Select one: a. 55% b. None of the answers given c. 90% d. 45%
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