Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 6, Problem 42P
Refer to the original data in the preceding problem for Martha’s Vineyard Marine Supply. Required:
- 1. Build a spreadsheet: Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the variable- and fixed-cost components in the company’s material-handling department costs.
- 2. Write the least-squares regression equation for the department’s costs.
- 3. Predict the firm’s material-handling department’s costs for a month when 2,300 units of activity are recorded.
- 4. Why do the three cost predictions computed in this and the preceding problem differ? Which method do you recommend? Why?
- 5. Build a spreadsheet: Use your Excel spreadsheet from requirement (1) to compute the R2 value for the regression. Interpret the R2 value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
please answer within 30 minutes.
Need some help making a cheet sheet for an up coming test. please provide examples. The exam covers chapters 1
through 13. Here are some suggested study topics: Cost Classifications - variable, fixed and mixed, period and product,
direct and indirect, opportunity, sunk, relevant, traceable, common, etc. Calculate the results of changes to cost
assumptions (CVP) Calculate net income based on contribution margin values either dollars or % Application of
Manufacturing Overhead - calculate predetermined overhead rate or activity rates applied to a product or job - job
order using a predetermined overhead rate or rates and activity-based costing calculate over and underapplied
overhead calculate adjusted cost of goods sold Job Costing What is the total cost of the job and average cost per unit.
Cost of Goods Manufactured and cost of goods sold Calculate break even and target profit Create a contribution format
income statement Gross margin calculations - absorption or variable costing…
As a start-up / ‘new’ manufacturer, one of your tasks as the Operations Manager is to identify the behaviour of manufacturing costs to develop a production cost budget. You know three methods can be used to identify cost behaviour from past data, but past data are not available because this is a start-up.
Identify and compare the three known methods of measuring cost behaviour.
Chapter 6 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQCh. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ
Ch. 6 - What is meant by a learning curve? Explain its...Ch. 6 - Suggest an appropriate independent variable to use...Ch. 6 - What is an outlier? List some possible causes of...Ch. 6 - Explain the cost estimation problem caused by...Ch. 6 - Describe the visual-fit method of cost estimation....Ch. 6 - What is the chief drawback of the high-low method...Ch. 6 - Explain the meaning of the term least squares in...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - List several possible cost drivers that could be...Ch. 6 - Prob. 21RQCh. 6 - Prob. 22ECh. 6 - The behavior of the annual maintenance and repair...Ch. 6 - WMEJ is an independent television station run by a...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - The Iowa City Veterinary Laboratory performs a...Ch. 6 - Chillicothe Meat Company produces one of the best...Ch. 6 - Rio Bus Tours has incurred the following bus...Ch. 6 - Prob. 31ECh. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Gator Beach Marts, a chain of convenience grocery...Ch. 6 - For each of the cost items described below, choose...Ch. 6 - The following selected data were taken from the...Ch. 6 - Antioch Extraction, which mines ore in Montana,...Ch. 6 - Nations Capital Fitness, Inc. operates a chain of...Ch. 6 - The Allegheny School of Music has hired you as a...Ch. 6 - Prob. 40PCh. 6 - (Note: Instructors who wish to cover all three...Ch. 6 - Refer to the original data in the preceding...Ch. 6 - Shortly after being hired as an analyst with...Ch. 6 - The controller of Chittenango Chain Company...Ch. 6 - Dana Rand owns a catering company that prepares...Ch. 6 - Madison County Airport handles several daily...Ch. 6 - Earth and Artistry, Inc. provides commercial...Ch. 6 - Prob. 48CCh. 6 - Refer to the data and accompanying information in...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Carolina Yachts builds custom yachts in its production factory in South Carolina. Once complete, these yachts must be shipped to the dealership. They have collected this shipping cost data: Prepare a scatter graph of the shipping data. Plot cost on the vertical axis and yachts shipped on the horizontal axis. Is the relationship between shipping costs and unit shipped approximately linear? Draw a straight line through the scatter graph. Using the high-low method, create the cost formula for Carolina Yachts shipping costs. The least-squares regression method was used and the analysis resulted in this cost equation: Y= 4,000+ 1,275x. Comment on the accuracy of your high-low method estimation. What would you estimate shipping costs to be if Carolina Yachts shipped 10 yachts in a single month? Use the cost formula you obtained in part B. Comment on how accurately this is reflected by the scatter graph you constructed. What factors other than number of yachts shipped do you think could affect Carolina Yachts shipping expense? Explain.arrow_forwardThe graphs below represent cost behavior patterns that might occur in acompany's cost structure. The vertical axis represents total cost, and thehorizontal axis represents activity output. Required:For each of the following situations, choose the graph from the group a-1 that best illustrates the cost pattern involved. Also, for each situation,identify the driver that measures activity output. 1. The cost of power when a fixed fee of $500 per month is chargedplus an additional charge of $0.12 per kilowatt-hour used2. Commissions paid to sales representatives. Commissions arepaid at the rate of 5 percent of sales made up to total annual salesof $500,000, and 7 percent of sales above $500,000.3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased inexcess of 3,000 units.4. The cost of surgical gloves, which are purchased in incrementsof 100 units (gloves come in boxes of 100 pairs).5. The cost of tuition at a…arrow_forwardGreen Shade manufactures insulated windows. The firm’s repair and maintenance (R&M) cost is mixed and varies most directly with machine hours worked. The following data (on the attached picture) have been gathered from recent operations: a. Use the high–low method to estimate a cost formula for repairs and maintenance. b. Use least squares regression to estimate a cost formula for repairs and maintenance. c. Does the answer to part (a) or to part (b) provide the better estimate of the relation ship between repairs and maintenance costs and machine hours? Why?arrow_forward
- Use the high-low method to develop a cost estimating equation for total manufacturing costs driven by total tables produced.The answer is Y=$2,556 + $727 x c. Excluding any unusual observations, use the high-low method to develop a cost-estimating equation for total manufacturing costs Comment on the results comparing them with (a). Using the image, What is the Cost estimating equation?arrow_forwardIf you have limitations, please answer the first few partsarrow_forwardOn the Data Tables - Student tab in your Excel spreadsheet, update the given information section of the Income Statement for Hello Company with the data below: Units Price per unit Variable expense per unit Total Fixed Costs Income Statement SCENARIO 1 Product A Product B Product C Required: 2. Using the Data Table What-if Analysis tool in Excel, determine the Units and Operating Income (Loss) for each product based on the following scenarios. (Hint: Don't forget that the warehouse can only hold up to 45,000 units.) Scenario 1: Pete wants to find the mix of units that will result in the highest overall Operating Income, perform this analysis using a two variable data table. Product A can vary between 32,000 units and a maximum of 37.000 units. Product B can vary between 5,000 units and a maximum of 10,000 units. Both Products A and B are manufactured in 1,000-unit increments. The production level of Product C is the same each month at 3,000 units. SCENARIO 2 Product A Product B Product…arrow_forward
- Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 97,500 $27,165,000 112,500 29,715,000 124,500 31,755,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine the variable cost per unit and the total fixed cost. Round your answer for variable cost to the nearest cent. Round your answer for total fixed costs to the nearest dollar. Variable cost: $fill in the blank 2 per unit Total fixed cost: $fill in the blank 3 Based on part (a), estimate the total cost for 80,000 units of production. Round your answer to the nearest dollar. Total cost for 80,000 units: $fill in the blank 4arrow_forwardFernando Garza's firm wishes to use factor rating to help select an outsourcing provider of logistics services. a) With weights from 1 - 5 (5 being the highest) and ratings from 1 100 (100 being the highest), use the following table to help Garza make his decision. In the following table, compute the weighted average score for each of the three companies (enter your responses rounded to one decimal place). Weight Overnight Criterion Quality Delivery Cost (W) Shipping Worldwide Delivery United Freight 5 88 80 72 3 71 90 72 2 71 85 97 Weighted average score: 79.5 84 77 The best outsource provider is Worldwide Delivery b) Garza decides to increase the weights for quality, delivery, and cost to 10, 6, and 4, respectively. If each weight is doubled, the best outsource provider is Worldwide Delivery . How does this change your conclusions? A. The conclusion changes since the weighted averages change. B. The conclusion does not change but the weighted averages change. C. The conclusion…arrow_forwardCan you provide step by step solution for every requirement?arrow_forward
- All applicable Exercises are available with McGraw-Hill’s Connect™Accounting.Cost classifications For each of the following costs, check the column(s) that most likely apply:Cost Variable FixedWages of assembly-line workersDepreciation—plant equipmentGlue and threadShipping costsRaw materials handling costsSalary of public relations managerProduction run setup costsPlant utilitiesElectricity cost of retail storesResearch and development expensearrow_forward5. Match the following cost pools and activities with the most appropriate cost driver. Group of answer choices a. number of parts b. square feet c. direct labor hours d. number of tests required e. machine hours f. machine setups g. number of orders received 1. setup cost pool? 2. assembly cost pool? 3. supervising cost pool? 4. testing cost pool? 5. ordering cost pool? 6. fringe…arrow_forwardWhat are the Costs per unit of Alfa and Beta under traditional and ABC costing systems? What would be the prices of Alpha and Beta traditional and ABC costing systems? Compare the costs and prices calculated in the two systems. Please write down the calculation process!thanks!!!arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY