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3310solmod08

# 3310solmod08 - Module 8 Answers 4-25(20 min Interpretation...

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Module 8 Answers 4-25. (20 min.) Interpretation of Regression Results—Multiple Choice: Cortez Company. a. (3) R 2 = .848 (84.8%), the explanation of variation in Y from the X regressor. b. (1) \$370,000. The equation resulting from this regression analysis is Total overhead = Estimated fixed cost + estimated variable cost per labor-hour x labor- hours = Intercept estimate + Coefficient estimate on independent variable x 50,000 DLH = \$120,000 + \$5 x 50,000 DLH = \$120,000 + \$250,000 = \$370,000 c. (2) \$82 Total labor-hours = Total direct labor costs ÷ Direct labor wage rate = \$640,000 ÷ \$16 per hour = 40,000 direct labor-hours Labor-hours per unit = Total labor hours ÷ Total units = 40,000 ÷ 20,000 = 2 labor-hours per unit Total variable cost per unit = Direct materials + Direct labor + Variable overhead = (\$800,000 ÷ 20,000) + (\$640,000 ÷ 20,000) + \$5 x 2 labor-hours = \$40 + \$32 + \$5 x 2 labor-hours = \$82 d. (4) \$14 Contribution-margin per unit = Price – variable cost per unit = \$96 – \$82 = \$14 e. (4) Total manufacturing cost = Fixed manufacturing cost + Variable manufacturing cost = \$120,000 + \$82 x units

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4-28. (40 min.) Interpretation of Regression Results—Simple Regression Using a Spreadsheet: Lucas Plant.
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