Multiple regression, Managerial Accounting

Assignment Help:

MULTIPLE REGRESSION

The least square regression equation discussed above was based on the assumption that total cost was determined by only one activity based variable. However, other variables are likely to affect labour costs such as labour hours, material costs, machine hours, etc. These may have an effect on labour costs.

The equation for the simple regression can be expanded to include more than one independent variable as shown below:

Y = a + b1X1 + b2 X2 + b3 X3 +………+bn Xn

For two independent variables, the function will be of the form:

Y = a + b1X1 + b2 X2

The normal equations can be given by:
∑y      = na + b1 ∑X1 + b2∑x2
∑X1Y  = a∑x1 + b1∑X12 + b2 ∑X1 ∑X2
∑X2 Y = a∑x2 + b1∑  X 1∑X2 +b2 ∑X2 

Normally computers are used for the solution of multiple regression.


Related Discussions:- Multiple regression

Analysis, Analysis Various business decisions have recurrent themes: wh...

Analysis Various business decisions have recurrent themes: whether to the outsource production or to the support functions, what level of production and pricing to establish, w

Advantages-disadvantages-standard costing, The advantages and disadvantages...

The advantages and disadvantages of standard costing The benefits for controlling having a standard costing system in operation can be summed up as follows; Cautiously pl

Transition probabilities, Transition probabilities These are the probab...

Transition probabilities These are the probabilities of moving from one state to another in the next time period. Usually they are written in the form of a probability matrix.

Explain the techniques of cvp analysis, Techniques of CVP Analysis  The...

Techniques of CVP Analysis  The CVP  analysis deals with the price costs structure and the sales volume and identifies the profit figure with one or other combination of these

Bills of exchange, A bill is explained as an unconditional order in writing...

A bill is explained as an unconditional order in writing, addressed through one person to the other, signed through the person providing it, requiring the person to whom it is addr

Find the formula for the quarrys short-run supply curve, Let a quarry's cos...

Let a quarry's cost function of producing Q tons of stone per hour be given by TC = Q 3 - 10Q 2 + 40Q + 25, so that marginal cost function is MC= 3Q 2 - 20Q + 40. (i) Find th

What is activity ratio, What is Activity ratio Funds are invested in se...

What is Activity ratio Funds are invested in several assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume

Ratio Analysis., X ltd. has a current ratio of 4.5:1 and acid test ratio of...

X ltd. has a current ratio of 4.5:1 and acid test ratio of 3:1. If its inventory is Rs. 24000, find out its current liabilities.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd