Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger

Exercise 60

(Appendix 3A) Method of Least Squares Using Computer Spreadsheet Program
Susan Lewis, owner of a florist shop, is interested in predicting the cost of delivering floral arrangements. She collected monthly data on the number of deliveries and the total monthly delivery cost (depreciation on the van, wages of the driver, and fuel) for the past year.

Required:
1. Using a computer spreadsheet program such as Excel, run a regression on these data. Print out your results.
2. Using your results from Requirement 1, write the cost formula for delivery cost. ( Note : Round the fixed cost to the nearest dollar and the variable rate to the nearest cent.)
3. CONCEPTUAL CONNECTION What is R 2 based on your results? Do you think that the number of direct labor hours is a good predictor of delivery cost?
4. Using the cost formula in Requirement 2, what would predicted delivery cost be for a month with 300 deliveries?