Reference no: EM13951044
Interpretation of Regression Results: Multiple Choice
Cortez Company is planning to introduce a new product that will sell for $96 a unit. The following manufacturing cost estimates have been made on 20,000 units to be produced the first year:
|
Direct materials
|
$800,000
|
|
Direct labor
|
640,000 (=$16 per hour × 40,000 hours)
|
Manufacturing overhead costs have not yet been estimated for the new product, but monthly data on total production and overhead costs for the past 24 months have been analyzed using simple linear regression. The following results were derived from the simple regression and provide the basis for overhead cost estimates for the new product.
|
Simple Regression Analysis Results
|
|
Dependent variable-Factory overhead costs
|
|
Independent variable-Direct labor-hours
|
|
Computed values
|
|
Intercept
|
$120,000
|
|
Coefficient on independent variable
|
$ 5.00
|
|
Coefficient of correlation
|
0.921
|
|
R2
|
0.848
|
Required
a. What percentage of the variation in overhead costs is explained by the independent
variable?
(1) 84.8%.
(2) 45.0%.
(3) 92.1%.
(4) 8.48%.
(5) Some other amount.b. What is the total overhead cost for an estimated activity level of 50,000 direct labor-hours?
(1) $120,000.
(2) $370,000.
(3) $250,000.
(4) $320,000.
(5) Some other amount.c. How much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression (assuming that direct materials and direct labor are variable costs)?
(1) $88.00.
(2) $82.00.
(3) $86.80.
(4) $72.00.
(5) 161Some other amount.
d. What is the expected contribution margin per unit to be earned during the first year on 20,000 units of the new product? (Assume that all marketing and administrative costs are fixed.)
(1) $96.
(2) $24.
(3) $56.
(4) $14.
(5) Some other amount.e. What is the manufacturing cost equation implied by these results?
(1) Total cost = $640,000 + $5.00 × Number of units.
(2) Total cost = $120,000 + $86.80 × Number of units.
(3) Total cost = $120,000 + $72.00 ×Number of units.
(4) Some other equation.
|
Consider the following turing-machine model
: a tape that is infinitely long in both directions and is divided into cells; at any given step, each cell either is blank or contains a 1 (we will refer to the latter type of cell as a non-blank cell)
|
|
Estimate monthly fixed costs and unit variable
: Estimate the monthly fixed costs and the unit variable cost per support call using the high-low estimation method. Draw a scattergraph relating call center costs to the number of support calls.
|
|
Internet and strayer university databases
: Using the Internet and Strayer University databases, research Starbucks' organizational culture and the key leadership and management traits used to execute the business strategy.
|
|
How basic buddhist beliefs were transformed in mahayana
: Buddha' s enlightenment and the meaning of suffering in Buddhism, Discuss how basic Buddhist beliefs were transformed in Mahayana Buddhism ( example: the idea of the Bodhisattva comes in)
|
|
Interpretation of regression results-multiple choice
: Cortez Company is planning to introduce a new product that will sell for $96 a unit. The following manufacturing cost estimates have been made on 20,000 units to be produced the first year:
|
|
What are the characteristics of the normal curve
: What are the characteristics of the normal curve? What human behavior, trait, or characteristic can you think of that is distributed normally?
|
|
Briefly summarize the belmont report
: Briefly summarize the Belmont Report. It is clear that the Belmont Report impacts researchers. Do you think that the Belmont Report has any impact or significance in the business world? Explain your answer.
|
|
Describe the behavior of the turing machine
: For questions 3 to 5, remember that a Turing machine starts in state 1, reading the leftmost nonblank cell.
|
|
Basic product costing-ethical issues
: Old Tyme Soda produces one flavor of a popular local soft drink. It had no work in process on October 31 in its only inventory account. During November, Old Tyme started 10,000 barrels. Work in process on November 30 is 1,200 barrels. The producti..
|