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Unformatted text preview: of change in the overhead cost pool is approximately $31,886. The P‐value of 0.0057 tells Bob that 57/1,000 times the actual unexplained value will not be within a reasonable range of $31,886. Similarly for the rate of change Bob can expect in the overhead cost pool when labour hours change by 1 unit is approximately b = $9.45/hour. Again the t‐Stat of 5.2290 > 2.202 at df = 11 and confidence level of 95%. the P‐value is only 4/1,000 that an observed rate of change will be beyond a reasonable range of $9.45. 10‐21 (cont’d) 3. Using the data provided in the regression output, the predicted range of values within which any future observed value of a and b should fall is calculated as: Range: a (critical value * (standard error of a÷√n) and: b (critical value * (standard error of b÷√n) The results of these calculations are: RANGE OF COEFFICIENT VALUES Cost Driver Labour Hours 95.0% √n= 3.317 df = 11 Coefficients Critical Value Standard Error High Low Intercept a $31,886.03 2.202
9,098.884 $37,863.93 $24,908.12
$ 9.45 2.202
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This note was uploaded on 01/23/2014 for the course TELFER adm3346 taught by Professor Collier during the Winter '12 term at University of Ottawa.
 Winter '12
 collier

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