MANAGERIAL ACCOUNTING F/MGRS.
5th Edition
ISBN: 9781259969485
Author: Noreen
Publisher: RENT MCG
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Textbook Question
Chapter 2A, Problem 2A.5E
Least-Squares Regression LO2-11
George Caloz ** Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company’s products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks:
For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week.
Required:
- Prepare a scattegraph plot. (Plot etching costs on the vertical axis and units on the horizontal axis.)
- Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per week Express these estimates in the form
- If the company processes five units next week, what would be the expected total etching cost? (Round your answer to the nearest cent.)
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Required information
George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the
company's products, a platinum diving watch, goes through an etching process. The company has recorded etching costs
as follows over the last six weeks:
Week
Units
7
2
30
Total Etching
Cost
$18
17
25
20
24
Expected total etching cost
16
$120
For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost
per week.
3. If the company processes five units next week, what would be the expected total etching cost? (Round your intermediate
calculations and final answer to 2 decimal places.)
Required information
George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the
company's products, a platinum diving watch, goes through an etching process. The company has recorded etching costs
as follows over the last six weeks:
Week
123456
Units
17
11
W3
13
12
14
Reg 2A
47
17
84
Total Etching
Cost
$ 26
20
For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost
per week.
604
2-a. Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per week.
2-b. Express these estimates in the form Y = a + bx.
Req 2B
24
22
25
28
$ 145
Complete this question by entering your answers in the tabs below.
Fixed etching cost per week
Variable etching cost per unit
Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per
week. (Round your answers to 2 decimal…
2
George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the
company's products, a platinum diving watch, goes through an etching process. The company has recorded etching costs
as follows over the last six weeks:
Week
123456
Units
9
6
11
5
7
14
52
Total Etching
Cost
$ 25
20
30
21
21
32
$ 149
For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost
per week.
Exercise 5A-5 Part 3 (Algo)
3. If the company processes eighteen units pext week, what would be the expected total etching cost? (Round your intermediate
calculations and final answer to 2 decimal places.)
Answer is complete but not entirely correct.
$ 38.00 X
Expected total etching cost
Chapter 2A Solutions
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