Exam 15: Least-Squares Regression Computations

Descoteaux Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. -Using the least-squares regression method,the estimate of the variable component of inspection cost per unit produced is closest to:

Descoteaux Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. -Using the least-squares regression method,the estimate of the fixed component of inspection cost per month is closest to:

The management of Ferriman Corporation would like to better understand the behavior of the company's warranty costs.Those costs are listed below for a number of recent months: Product Returns Warranty Cost April 24 \ 2,972 May. 23 \ 2,928 June. 27 \ 3,141 July 39 \ 3,752 August 36 \ 3,569 September 35 \ 3,551 October 26 \ 3,071 November. 37 \ 3,636 Management believes that warranty cost is a mixed cost that depends on the number of product returns. Required: Estimate the variable cost per product return and the fixed cost per month using the least-squares regression method.

When analyzing a mixed cost,you should always plot the data in a scattergraph,but it is particularly important to check the data visually on a scattergraph when the R2 is very high.

Moeller Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on the number of units produced.Using the least-squares regression method,the estimates of the variable and fixed components of inspection cost would be closest to:

Your boss would like you to estimate the fixed and variable components of a particular cost.Actual data for this cost over four recent periods appear below. Using the least-squares regression method,what is the cost formula for this cost?

Below are cost and activity data for a particular cost over the last four periods.Your boss has asked you to analyze this cost so that management will have a better understanding of how this cost changes in response to changes in activity. Activity Cost Period 1 46 \ 292 Period 2 40 \ 271 Period 3 42 \ 279 Period 4 41 \ 267 Required: Using the least-squares regression method,estimate the cost formula for this cost.

Gelrud Corporation's recent utility costs are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours. -Using the least-squares regression method,the estimate of the variable component of utility cost per machine-hour is closest to:

The least-squares regression method:

Carr Company reports the following data for the first six months of the year: -Using the least-squares regression method,the estimated monthly fixed component of the electrical cost is closest to:

Executive Training,Inc. ,provides a personal development seminar that is popular with many companies.The number of seminars offered over the last five months,along with the total costs of offering these seminars,follows: Seminars Offered Costs Incurred April 55 \ 15,400 May 45 \ 14,000 June 60 \ 18,000 July 50 \ 14,700 August 75 \ 19,000 Required: a.Using the high-low method,estimate the variable cost per seminar and the total fixed cost per month. b.Using the least-squares regression method,compute the variable cost per seminar and the total fixed cost per month.(Round off to the nearest whole dollar. )

Galarneau Inc.maintains a call center to take orders,answer questions,and handle complaints.The costs of the call center for a number of recent months are listed below: Calls Taken Call Center Cost February. 7,851 \ 85,115 March. 7,820 \ 84,934 April. 7,861 \ 85,178 May. 7,860 \ 85,161 June 7,825 \ 84,965 July . 7,836 \ 85,009 August. 7,879 \ 85,262 September 7,866 \ 85,201 Management believes that the cost of the call center is a mixed cost that depends on the number of calls taken. Required: Estimate the variable cost per call and fixed cost per month using the least-squares regression method.

The management of Ferry Corporation would like for you to analyze their repair costs,which are listed below: Management believes that repair cost is a mixed cost that depends on the number of machine-hours.Using the least-squares regression method,the estimates of the variable and fixed components of repair cost would be closest to:

Least-squares regression selects the values for the intercept and slope of a straight line that minimize the sum of the squared errors.

Which of the following methods of analyzing mixed costs can be used to estimate an equation for the mixed cost?

Gelrud Corporation's recent utility costs are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours. -Using the least-squares regression method,the estimate of the fixed component of utility cost per month is closest to:

Carr Company reports the following data for the first six months of the year: -Using the least-squares regression method,the estimated variable electrical cost per machine hour is closest to:

In least-squares regression,independent variables are not included in the computations of the slope and intercept.

Recent maintenance costs of Prideaux Corporation are listed below: Management believes that maintenance cost is a mixed cost that depends on machine-hours. -Using the least-squares regression method,the estimate of the variable component of maintenance cost per machine-hour is closest to:

Dillenbeck Printing Corp. ,a book printer,has provided the following data: Titles Printed Press Setup Cost February. 33 \ 3,170 March. 34 \ 3,203 April 46 \ 3,688 May. 28 \ 2,996 June 44 \ 3,607 July 42 \ 3,551 August 43 \ 3,586 September 39 \ 3,413 Management believes that the press setup cost is a mixed cost that depends on the number of titles printed.(A specific book that is to be printed is called a "title".Typically,thousands of copies will be printed of each title.Specific steps must be taken to setup the presses for printing each title-for example,changing the printing plates.The costs of these steps are the press setup costs. ) Required: Estimate the variable cost per title printed and the fixed cost per month using the least-squares regression method.