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just olya [345]
3 years ago
12

An important application of regression analysis in accounting is in the estimation of cost. Bycollecting data on volume and cost

and using the least squares meathod to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.
Production Volume (units)Total Cost ($)
4004000
4505000
5505400
6005900
7006400
7507000
A. Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume.
B. What is the variable cost per unit produced?
C. Compute the coefficient of determination. What percentage of the variation in total cost can be explaned by production volume?
D. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this opperation?
Business
1 answer:
Yuki888 [10]3 years ago
6 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Consider the following sample of production volumes and total cost data for a manufacturing operation.

Production Volume (units)Total Cost ($)

400units $4000

450units $5000

550units $5400

600units $5900

700units $6400

750units $7000

We will use the high-low method to calculate variable cost and fixed cost.

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ highest activity units - Lowest activity units)

Variable cost per unit= (7000 - 4000)/(750 - 400)= $8.57

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 7000 - (8.57*750)= 572

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 4000 - (8.57*400)= 572

Proportion of variable cost= 8.57/572= 0.0149= 1.49%

500 units= 572 + 500*8.57= 4,857

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Your question is incomplete, but most probably your full question was:

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7 0
2 years ago
During the current month, a company that uses job order costing incurred a monthly factory payroll of $180,000. Of this amount,
shutvik [7]

Answer:

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Manufacturing overhead (Dr.)           40,000

                     Payroll / Salaries Payable                $180,000

Explanation:

Job order costing is a costing method used by the managerial accountants when the company produces different products and these products are not identical in-nature. An alternative to this method is Process costing which is used when a company produces homogenous products. In this case, the company has adopted job order costing because its products can be hetrogenous in-nature. Moreover, the company has incurred a Payroll cost of $180,000. $40,000 out of this amount is classified as indirect labor because the company is not able to trace it to a particular job and it will be treated as manufacturing overhead. This amount could have been paid to supervisors of factory or maintenance workers. The remaining amount of $140,000 is classified as direct labor because the management is in a better position to trace it to a particular job. This amount directly goes to Work-in-Process account.

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Thanks!

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Answer:

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3 0
4 years ago
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Answer:

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7 0
3 years ago
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yuradex [85]

Answer:

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In our workings, we eliminated inventory from current assets.  We also eliminated notes payable which would be rolled over the next year.

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