take home test paper

# take home test paper - Oct. 1, 2008 Advanced Cost Take Home...

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Oct. 1, 2008 Advanced Cost Take Home Test Given the distribution of data for August through July pertaining to the Pack Supplies Costs and their potential relationship with the number of units produced, the production volume, and the number of orders filled I attempted to find the best cost driver to estimate costs. I evaluated the data through the use of ordinary least squares regression analysis and tested the independent variables individually, in groups of two, and all together in an attempt to find the cost function with the highest correlation while avoiding the violations of the assumptions. My assumptions included linearity, independence, homoscedasticity, and normality. Reasons for Selecting Orders Filled as Cost Driver: A strong R-square of 79% suggests that 79% of the variance between the predicted values and actual values can be explained by the number of orders filled. This is a high percentage and provides us with a reasonable idea that “orders filled” is a good cost driver. The F-test is a formal test telling if the function is statistically different than the mean. The significance of F shows that there is only a 0995395E-05 percent chance that we will come up with an answer the same as the mean. This is desirable because it tells us the chance of coming up with the average, and being that we can never do worse than

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## This note was uploaded on 12/02/2009 for the course 91 Adv Cost A taught by Professor Robson during the Fall '08 term at Bloomsburg.

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take home test paper - Oct. 1, 2008 Advanced Cost Take Home...

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