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Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767 Exercise 39
Method of Least Squares, Developing and Using the Cost Formula
The method of least squares was used to develop a cost equation to predict the cost of receiving. Ninety-six data points from monthly data were used for the regression. The following computer output was received:
The driver used was number of parts inspected.
Required:
1. What is the cost formula
2. Using the cost formula from Requirement 1, identify each of the following: independent variable, dependent variable, variable rate, and fixed cost per month.
3. Using the cost formula, predict the cost of receiving for a month in which 2,500 parts are inspected.
The method of least squares was used to develop a cost equation to predict the cost of receiving. Ninety-six data points from monthly data were used for the regression. The following computer output was received:
The driver used was number of parts inspected.
Required:
1. What is the cost formula
2. Using the cost formula from Requirement 1, identify each of the following: independent variable, dependent variable, variable rate, and fixed cost per month.
3. Using the cost formula, predict the cost of receiving for a month in which 2,500 parts are inspected.
Explanation
Verified
Verified
1. The cost formulas of receiving are as...
Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
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