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

Define the balanced score card, Define the Balanced Score Card? 1. Dist...

Define the Balanced Score Card? 1. Distinguish between standard control and budgetary costing. 2. Define the ‘Balanced Score Card? Explain the steps in implementing ‘Balance

Determine the application of zero base budgeting, Application of zero base ...

Application of zero base budgeting In the following areas ZBB may be applied: 1) redundant schemes may be discontinued 2) identify the duplicate schemes and merge them in

English, accounting process or accounting cycle

accounting process or accounting cycle

Algebraic analysis, ALGEBRAIC ANALYSIS The supposition of linear cost b...

ALGEBRAIC ANALYSIS The supposition of linear cost behavior allows use of straight-line graphs and simple linear algebra in cost-volume study. The net cost is a semi-variable c

Bridge loans, Bridge loans are obtainable from the banks and financial inst...

Bridge loans are obtainable from the banks and financial institutions while the source and timing of the funds to be raised is identified along with certainty. While there is a tim

Describe the limitations of management accounting, Describe the Limitations...

Describe the Limitations of management accounting: 1. Based on accounting information: the correctness and effectiveness of managerial decisions will depend upon the quality

What are the advantages of activity based costing, Advantages of activity b...

Advantages of activity based costing 1) It helps understanding the behavior of overhead costs and their relations ship to products services customers and market segments. 2)

Multiple products, differentiate between multiple product, selling product ...

differentiate between multiple product, selling product and margin managent

Periodic system and a perpetual system, Your manager has informed you that ...

Your manager has informed you that the company is trying to determine if it should use a periodic system or a perpetual system in accounting for the inventory. He wants you to spea

Explain functional classification of ratios, Explain Functional classificat...

Explain Functional classification a)  Liquidity ratio: these are the ratio which measures the short term solvency or financial position of a firm. These ratios are calculati

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