Solved

Scranton Printer Company Would Like to Estimate Its Total Manufacturing

Question 203

Essay

Scranton Printer Company would like to estimate its total manufacturing costs using regression analysis but is unsure whether machine hours or units produced would be a better predictor of total manufacturing costs.
Output from regression analysis using machine hours as the volume (cost driver)follows.Note: the results are excerpts so not all of the regression analysis results are presented. Scranton Printer Company would like to estimate its total manufacturing costs using regression analysis but is unsure whether machine hours or units produced would be a better predictor of total manufacturing costs. Output from regression analysis using machine hours as the volume (cost driver)follows.Note: the results are excerpts so not all of the regression analysis results are presented. Output from a regression analysis using units produced as the volume (cost driver)follows.Again,the results are excerpts so not all of the regression analysis results are presented. Required: a.What is the cost equation if machine hours is used as the volume (cost driver)? b.Predict total manufacturing costs using machine hours as the volume (cost driver)if Scranton Paper Company uses 18,000 hours. c.What is the cost equation if units produced is used as the volume (cost driver)? d.Predict total manufacturing costs using units produced as the volume (cost driver)if Scranton Paper Company produces 65,000 units. e.Which volume (cost driver)is a better predictor of total manufacturing costs? Why?
Output from a regression analysis using units produced as the volume (cost driver)follows.Again,the results are excerpts so not all of the regression analysis results are presented. Scranton Printer Company would like to estimate its total manufacturing costs using regression analysis but is unsure whether machine hours or units produced would be a better predictor of total manufacturing costs. Output from regression analysis using machine hours as the volume (cost driver)follows.Note: the results are excerpts so not all of the regression analysis results are presented. Output from a regression analysis using units produced as the volume (cost driver)follows.Again,the results are excerpts so not all of the regression analysis results are presented. Required: a.What is the cost equation if machine hours is used as the volume (cost driver)? b.Predict total manufacturing costs using machine hours as the volume (cost driver)if Scranton Paper Company uses 18,000 hours. c.What is the cost equation if units produced is used as the volume (cost driver)? d.Predict total manufacturing costs using units produced as the volume (cost driver)if Scranton Paper Company produces 65,000 units. e.Which volume (cost driver)is a better predictor of total manufacturing costs? Why?
Required:
a.What is the cost equation if machine hours is used as the volume (cost driver)?
b.Predict total manufacturing costs using machine hours as the volume (cost driver)if Scranton Paper Company uses 18,000 hours.
c.What is the cost equation if units produced is used as the volume (cost driver)?
d.Predict total manufacturing costs using units produced as the volume (cost driver)if Scranton Paper Company produces 65,000 units.
e.Which volume (cost driver)is a better predictor of total manufacturing costs? Why?

Correct Answer:

verifed

Verified

a.
y = $314,842.08 + $8.96x
b.
blured image c.
y = ...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q35: An expense such as advertising could be

Q52: U.S. GAAP requires companies to use absorption

Q127: Renting a scooter and paying $30 per

Q135: Using account analysis, what type of cost

Q199: Which type of cost behavior is indicated

Q200: At Dwight Incorporated,total fixed and variable costs

Q202: To follow is information about the units

Q205: Jones Ice Cream Stand is operated by

Q245: If a regression analysis shows an R

Q286: A contribution margin income statement allows managers