An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume

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An Important Application Of Regression Analysis In Accounting Is In The Estimation Of Cost By Collecting Data On Volume 1 (21.3 KiB) Viewed 14 times

An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation Production Volume Total Cost (units) ($) 4,000 4,900 400 450 550 600 700 750 5,500 5,800 6,300 6.900 (a) Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume (Round your numerical values to two decimal places) 9-1334.67+7.36x (b) What is the vanabis cost (in dollars) per unit produced $ 7.56 (c) Compute the coefficient of determination (Round your answer to three decimar places) What percentage of the variation in total cost can be explained by production volume? (Round your answer to one decimal place) - Bad Bad Bad (8) The company's production schedule shows 500 units must be produced ned month. Predict the bital cost On diars) for this speration (Round your answer to the nearest cent)