The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costs = +xBillable Hours X Monthly Overhead Costs and Billable Hours Data (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) Overhead Costs Billable Hours 0 $315,000 3,000 $365,000 4,000 $395,000 5,000 $447,000 6,000 $530,000 7,000 $550,000 8,000

The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costs = +xBillable Hours X Monthly Overhead Costs and Billable Hours Data (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) Overhead Costs Billable Hours 0 $315,000 3,000 $365,000 4,000 $395,000 5,000 $447,000 6,000 $530,000 7,000 $550,000 8,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 20BEA: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...

See similar textbooks

Similar questions

The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costs +(9) x Billable Hours (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) X Monthly Overhead Costs and Billable Hours Data Overhead Costs Billable Hours $315,000 3,000 $360,000 4,000 $385,000 5,000 $438,000 6,000 $520,000 7,000 $540,000 8,000 D Print Done
The controller of the Blade Company wants you to estimate a cost function from the following two observations in a general ledger account called Maintenance: (Click to view the information.) Required 1. Estimate the cost function for maintenance. 2. Can the constant in the cost function be used as an estimate of fixed maintenance cost per month? Explain. Requirement 1. Estimate the cost function for maintenance. (Round your answers to the nearest cent as needed.) Maintenance costs = Maintenance costs = +( +( X X Requirement 2. Can the constant in the cost function be used as an estimate of fixed maintenance cost per month? Explain. the relevant range, not at cost levels the relevant range. If there are no months with zero The cost function in requirement 1 is an estimate of how costs behave machine-hours represented in the maintenance account, data in that account function provides the best available starting point for a straight line that approximates how a cost behaves be used to…
Matching graphs with descriptions of cost and revenue behavior. (D. Green, adapted) Given here are a number of graphs. The horizontal axis of each graph represents the units produced over the year, and the vertical axis represents total cost or revenues. Indicate by number which graph best fits the situation or item described (a–h). Some graphs may be used more than once; some may not apply to any of the situations. Direct material costs Supervisors’ salaries for one shift and two shifts A cost-volume-profit graph Mixed costs—for example, car rental fixed charge plus a rate per mile driven Depreciation of plant, computed on a straight-line basis Data supporting the use of a variable-cost rate, such as manufacturing labor cost of $14 per unit produced Incentive bonus plan that pays managers $0.10 for every unit produced above some level of production Interest expense on $2 million borrowed at a fixed rate of interest
The chief executive of Dabid's salon is interested in accumulating some information on the overhead costs incurred by the Company. You have been asked to analyze the following six months' worth of data: Month Overhead Cost No. of Appointments 867 P 48,128 April May June 45,200 624 47,120 689 July August September 50,800 974 47,460 49,920 730 901 Using the least squares regression method, give an estimate of the fixed cost for each month P34,371.72 P35,631.77 P36,804.09 O P37,545.70
We have seen how cost and volume assumptions affect net income. A common application of CVP analysis is a tool to forecast sales, costs, and income. Assume that you are actively searching for a job. Identify and discuss three assumptions relating to your expected revenue (salary), and three assumptions related to your expected costs (expenses) for the first year of your new job.
Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?
Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?
Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Refer to the information for Pizza Vesuvio on the previous page. Coefficients shown by a regression program for Pizza Vesuvios data are: Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor and the variable rate per employee hour. 2. Construct the cost formula for total labor cost. 3. Calculate the budgeted cost for next month, assuming that 675 employee hours are budgeted. (Note: Round answers to the nearest dollar.) Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
Scattergraph method Using the data in P4-2 and a piece of graph paper: 1. Plot the data points on the graph and draw a line by visual inspection, indicating the trend shown by the data points. 2. Determine the variable cost per unit and the total fixed cost from the information on the graph. 3. Determine the variable cost to be charged to the product for the year. 4. Determine the fixed cost to be charged to factory overhead for the year. 5. Do these answers agree with the answers to P4-2? Why or why not?
Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?
The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a sim Overhead Costs (Round the const Monthly Overhead Costs and Billable Hours Data Overhead Costs Billable Hours $385,000 2,000 $425,000 3,000 $445,000 4,000 $496,000 5,000 $560,000 6,000 $580,000 7,000 - clude the $ symbol in your answers.)