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

Learning curve theory, LEARNING CURVE THEORY The first time a new opera...

LEARNING CURVE THEORY The first time a new operation is performed both workers and operating procedures are untried but as the operation is replaced the workers becomes more fa

Responsibility accounting, Responsibility Accounting This is a term use...

Responsibility Accounting This is a term used to define the measuring of performance of decentralized units, using account results. Responsibility accounting recognizes various

Explain the concepts of costs, Explain the concepts of costs. A cost ac...

Explain the concepts of costs. A cost accountant is mainly concerned with the following cost concepts. 1. Concept of objectives: it is this concept that gives direction to

Accounting 601, need help with a master budget and assumptions for project

need help with a master budget and assumptions for project

Importance of a budget, Importance of a budget A Budget is a plan expre...

Importance of a budget A Budget is a plan expressed in monetary terms. It is prepared prior to the budget period and may show income, expenses and the capital to be used i.e. a

Cost-volume profit analysis , COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCT...

COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCTION You can employ cost-volume-profit analysis to examine the natural relationship among cost, volume, and profit in pricing decision

Managerial accounting, Weldon Industrial Gas Corporation supplies acetylene...

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store''s operations follow: 500 Garrison, Managerial Accounting, 12t

Determine the proprietary ratio and equity ratio, Proprietary ratio/ equit...

Proprietary ratio/ equity ratio  Meaning: the ratio measures a relationship among proprietor's funds and the total assets. Objective: the objective of computing this ra

Explain out of pocket cost, Explain Out of pocket cost A cost which wil...

Explain Out of pocket cost A cost which will have to be paid to outsides as against cross such as depreciation, which do not require any cash payment this cost is relevant in t

Advantages of transfer pricing, Advantages of Transfer Pricing (a) Tran...

Advantages of Transfer Pricing (a) Transfer pricing is similar to cost apportionment and allocation in that values of one department are passed to another. For cost apportionme

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