An important application of regression analysis in accounting is in the estimation of cost. By collecting...

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An important application of regression analysis in accounting isin the estimation of cost. By collecting data on volume and costand using the least squares method to develop an estimatedregression equation relating volume and cost, an accountant canestimate the cost associated with a particular manufacturingvolume. Consider the following sample of production volumes andtotal cost data for a manufacturing operation.
Production Volume (units) Total Cost ($) 400 4,900 450 5,900 5506,300 600 6,800 700 7,300 750 7,900
Compute b1 and b0 (to 1 decimal).
b1 b0 Complete the estimated regression equation (to 1decimal).y= + x
What is the variable cost per unit produced (to 1 decimal)?$
Compute the coefficient of determination (to 3 decimals).
Note: report r2 between 0 and 1. r2 =
What percentage of the variation in total cost can be explainedby the production volume (to 1 decimal)? %
The company's production schedule shows 500 units must beproduced next month.
What is the estimated total cost for this operation (to thenearest whole number)? $

Answer & Explanation Solved by verified expert

4.4 Ratings (736 Votes)

Solution We can use the excel regression data analysis tool toanswer the given questions The excel output is given belowSUMMARY OUTPUTRegression StatisticsMultiple R09791RSquare09587Adjusted See Answer

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