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Chap4AsgnBUS4113 - Problem 2 You run a regression analysis...

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Amberton University BUS 4113 – Accounting and Finance for Mangers Chapter 4 Assignment Professor: Dr. Jonathan Schultz Name: Date: 6/26/2010 Short-Answer Questions : Label whether each of the following costs is most likely fixed (F) or variable (V). Direct materials V Factory rent F Sales commissions expense V Direct labor V Depreciation on factory building F Take Home Problems : Problem 1: Sabina and Associates has the following current year costs: Variable costs $4 per unit Fixed costs $20,000 Next year, the company plans to enter into an arrangement with a supplier that will result in a 15% decrease in variable costs. They also plan on reducing their rental space, which will decrease fixed costs by 10%. Required : A. What will be the new equation to predict total costs? [4 – (4 X 15%) ]x + [20,000 – (20,000 X 10%)] = 3.4x + 18,000 B. If next year's production is expected to be 10,000 units, what will be total estimated costs? 3.4 X 10,000 + 18,000 = 52,000
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Unformatted text preview: Problem 2: You run a regression analysis and receive the following results: Multiple R .39429 R Square .15547 Adjusted R Square .14964 Standard Error .44416 Analysis of Variance DF Sum of Squares Mean Square Regression 1 5.26588 5.26588 Residual 145 28.60536 .19728 F = 26.69262 Signif F = .0000 Variables in the Equation Variable Coefficients Standard error t Stat P-value X Variable 1 11.0300 .021000 5.166 .0000 Intercept 8833.0700 .090000 9.751 .0000 Required : A. What is the fixed cost in this regression analysis? 8833.07 B. What is the variable cost per unit? 11.03 C. Prepare the cost equation based upon these results. 8833.07 + 11.03x D. Does this regression equation "fit" the data well? What information did you examine to answer this question? No. R square = 0.15. Only .15 is of the variation in overhead coast is explained by increasing or decreasing. The independent variable is not reliable....
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