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

Explain the categories of the activity cost drivers, Explain the categories...

Explain the categories of The activity cost drivers The activity cost drivers can broadly be classified into following three categories: 1) Transaction drivers: for exampl

Alternative performance measures, Alternative performance measures Ther...

Alternative performance measures There are various measures that can be used to measure performance of a decentralized company. The major ones are: •    Return on Investmen

State the factors of cvp, State the factors of CVP The three factors of...

State the factors of CVP The three factors of CVP analysis I e cost volume and profit are interconnected and dependent on one another . for example profit depends upon sales se

Study guide , The following information pertains to Fairways Driving Range,...

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will

What is replacement cost, Replacement cost It is the cost of replacing ...

Replacement cost It is the cost of replacing a material or asset, by purchase from the current market. If an X material was originally purchased @ Rs. 250 per Kg. And know i

Why is the activity based costing unaccepable for ex, Ask question #Miwhy i...

Ask question #Miwhy is the activity based costing unaccepable for external financial reportnimum 100 words accepted#

Extra shift decision, EXTRA SHIFT DECISION These decisions are concerne...

EXTRA SHIFT DECISION These decisions are concerned with whether or not a company should work for 8 hrs, 16hrs, or 24 hrs a day or week days only or weekends also.  The factors

Transfer pricing methods, Transfer Pricing Methods Transfer pricing met...

Transfer Pricing Methods Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel

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