costacctg13_sm_ch10

# 3 guidelines presented in the chapter could be used

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Unformatted text preview: s costs of setup­labor and setup equipment. The regression of number of setup­hours andsetup costs also has a better fit, a significant independent variable, and better satisfies the assumptions of the estimat ion technique. 10­33 10­39 (30min.) Multiple regression (continuation of 10­38). 1. Solut ion Exhibit 10­39 presents the regressio n output for setup costs using both number of setups and number of setup­hours as independent variables (cost drivers). SOLUTION EXHIBIT 10­39 Regressio n Output for Mult iple Regressio n for Setup Costs Using Both Number o f Setups and Number of Setup­Hours as Independent Variables (Cost Drivers) SU MMA RY OUTP UT Re gre ss ion S ta tis tics Multiple R 0. 92 594 047 4 R Sq uar e 0. 85 736 576 2 Ad jus te d R Squ are 0. 80 982 101 6 Stan dar d Er ror 14 391 .6 790 9 Obs erv ations 9 AN OVA df Reg res s ion Res idu al To ta l 2 6 8 S S MS F 746 9930 038 37 349 650 19 18. 032 818 124 2722 562 2 071 204 27 871 2652 600 S ignific anc e F 0 .0 029 018 26 In te rc ept Num b er of Setup s Num b er of Setup ­Ho urs C oefficie nts S ta nda rd E rror t S ta t P ­v alu e ­3 894 .8 318 9 20 831 .39 503 ­ 0.186 969 33 0.8578 466 6 0. 840 273 8 13 2.0202 547 0 .4 608 404 51 0.6611 444 53 .2 993 662 1 1 1.3948 941 4 .6 774 779 79 0.0034 048 L ower 9 5% ­ 5486 7. 419 16 ­ 262. 20 165 15 2 5. 417 064 86 U ppe r 9 5% Lo wer 9 5.0% Uppe r 95.0% 47 077 .7 553 8 ­ 548 67.41 916 4 707 7. 755 38 38 3.882 199 1 ­ 262 .2 016 515 3 83. 88 219 91 81 .1 816 675 7 25. 41 706 486 8 1. 181 667 57 2. Economic plausibilit y A posit ive relat ionship between setup costs and each of the independent variables (number of setups and number of setup­hours) is econo mically plausible. r2 = 86%, Adjusted r2 = 81% Standard error of regression =\$14,392 Excellent goodness of fit. The t­value of 0.46 for number of setups is not significant at the 0.05 level. The t­value of 4.68 for number of setup­hours is significant at the 0.05 level. Assuming linearit y, constant variance, and normality of...
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## This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.

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