App05A - Appendix 5A, Least-Squares Regression Computations...

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Appendix 5A, Least-Squares Regression Computations Question Type Difficulty LO1: Understand fixed and variable costs LO2: Scattergraph analysis LO3: High-low analysis LO4: Contribution format income statement LO5: Least-squares regression (Appendix 5A) Professional Exam Adapted ID Origin CMA/CPA origin 1 T/F E x New,6/27/97,A E.N. 2 M/C H x New,6/28/97,A8 E.N. 3 M/C H x 8/22/2004 Single MC G3 E.N. 4 M/C H x 8/22/2004 Single MC H3 E.N. 5A- 1 5-6 Multipart M/ C M x 8/21/2004 Multi MC G3 E.N. 5A- 2 7-8 Multipart M/ C M x 8/21/2004 Multi MC H3 E.N. 5A- 3 9-10 Multipart M/ C M x 8/21/2004 Multi MC I3 E.N. 11 Problem H x New,6/29/97,A8 E.N. 12 Problem H x 8/21/2004 Problem H3 E.N. 13 Problem H x 8/21/2004 Problem I3 E.N. 14 Problem H x 8/22/2004 Problem J3 E.N. 5A-1
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Appendix 5A, Least-Squares Regression Computations True / False Questions 1. The R2 (i.e., R-squared) indicates the proportion of a mixed cost that is variable. True False Multiple Choice Questions 2. Your boss would like you to estimate the fixed and variable components of a particular cost. Actual data for this cost over four recent periods appear below. Using the least-squares regression method, what is the cost formula for this cost? A. Y = $24.51 + $1.08X B. Y = $10.33 + $1.92X C. Y = $0.00 + $2.32X D. Y = $15.80 + $1.70X 5A-2
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Appendix 5A, Least-Squares Regression Computations 3. Delreal Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on the number of units produced. Using the least-squares regression method, the estimates of the variable and fixed components of inspection cost would be closest to: A. $20.27 per unit plus $5,905 per month B. $44.44 per unit plus $10,867 per month C. $20.68 per unit plus $5,807 per month D. $20.57 per unit plus $5,837 per month 5A-3
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Appendix 5A, Least-Squares Regression Computations 4. The management of Smoots Corporation would like for you to analyze their repair costs, which are listed below: Management believes that repair cost is a mixed cost that depends on the number of machine- hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to: A. $4.64 per machine-hour plus $34,603 per month B. $2.09 per machine-hour plus $19,018 per month C. $2.79 per machine-hour plus $13,787 per month D. $2.00 per machine-hour plus $19,649 per month 5A-4
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Appendix 5A, Least-Squares Regression Computations Magnano Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. 5. Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to: A. $3.51 B. $3.49 C. $4.93 D. $3.54 6. Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to: A. $4,400 B. $1,290 C. $4,585 D. $1,318 5A-5
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This note was uploaded on 11/10/2010 for the course ACCOUNTING acc taught by Professor Sign during the Spring '10 term at S. Alabama.

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App05A - Appendix 5A, Least-Squares Regression Computations...

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