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1 answer:
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Answer:
option (a) Widgets $2,400,000, Gadgets $1,800,000, Targets $5,400,000
Step-by-step explanation:
Data provided in the question:
Allocated estimated overhead = $9,600,000
Expected use of cost drivers for the activity = 800,000 inspections.
Inspections required by Widgets = 200,000
Inspections required by Gadgets = 150,000
Inspections required by Targets = 450,000
Therefore,
Total overhead per activity =
=
= $12 per activity
Thus,
Overhead allocated to Widgets = 200,000 × 12 = $2,400,000
Overhead allocated to Gadgets = 150,000 × 12 = $1,800,000
Overhead allocated to Target = 450,000 × 12 = $5,400,000
Hence, The correct answer is option (a)
The value of a = 2.17 and b = 1.95.
<h3>What is regression line?</h3>A regression line is a graphic representation of the regression equation expressing the hypothesized relationship between an outcome or dependent variable and one or more predictors or independent variables;
y=
Correlation:
r=0.964
R-squared:
r²=0.9292
Hence, value of a and b is 2.17 and 1.95.
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