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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 33
Cost Estimation: Simple Regression
The following information on maintenance and repair costs and revenues for the last two years is available from the accounting records at Arnie's Arcade Video Palace. Arnie has asked you to help him understand the relation between business volume and maintenance and repair cost.
Required
a. Ignoring the data, would you predict that, in general, there is a positive relation between revenues and maintenance and repair costs Why
b. Estimate a linear regression with maintenance and repair cost as the dependent variable and revenue as the independent variable. Does the result support your prediction in part ( a ) What are some factors that may explain the result
The following information on maintenance and repair costs and revenues for the last two years is available from the accounting records at Arnie's Arcade Video Palace. Arnie has asked you to help him understand the relation between business volume and maintenance and repair cost.
Required
a. Ignoring the data, would you predict that, in general, there is a positive relation between revenues and maintenance and repair costs Why
b. Estimate a linear regression with maintenance and repair cost as the dependent variable and revenue as the independent variable. Does the result support your prediction in part ( a ) What are some factors that may explain the result
Explanation
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Cost estimation
Cost estimation is an i...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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