Exam 24: Least-Squares Regression Computations

Recent maintenance costs of Pavelko 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:

The R2 (i.e., R-squared) indicates the proportion of a mixed cost that is variable.

Magnano 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:

Mccatty 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: 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.

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. Required: Using the least-squares regression method, estimate the cost formula for this cost. n = 4 sumX = 180 sumY = 1,382 sumXY = 62,247 sumX^2 = 8,110 b = [n(sumXY)-(sumX)(sumY)]/[n(sumX^2)-(sumX)^2] = [4(62,247)-(180)(1,382)]/[4(8,110)-(180)^2] = $5.70 (rounded to nearest whole cent)

Delreal 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:

Magnano 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:

Meleski 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:

The management of Smoots 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:

Stamp Printing Corp., a book printer, has provided the following data: 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.

Meleski 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 management of Archie 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: 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.

Recent maintenance costs of Pavelko 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 fixed component of maintenance cost per month is closest to: