Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 5, Problem 1.6GBP
To determine
Introduction:
Least-square regression:
It is a statistical technique that shows the best fitting line between X-axis and the Y-axis. It helps minimize the sum squared errors between regression line and actual data.
To prepare:
Linear cost equation.
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Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is
concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were
higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's
profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the
previous fiscal year for maintenance costs and machine hours follow:
Month Maintenance Costs Machine Hours
$ 2,665
2,710
2,760
1
2
3
4
6
7
8
9
10
11
12
2,860
2,895
Maintenance cost
3,045
2,905
2,945
2,820
2,610
2,630
2,930
1,566
1,670
1,685
1,735
1,855
1,890
1,865
1,885
1,775
1,450
1,630
1,465
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit
variable cost)" to 4 decimal places. Enter the…
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is
concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were
higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's
profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the
previous fiscal year for maintenance costs and machine hours follow:
Month Maintenance Costs Machine Hours
$ 2,695
2,740
2,790
2,890
2,925
3,025
2,935
1
2
3
4
56789012
10
11
2,975
2,850
2,640
2,660
2,960
Maintenance cost
1,620
1,730
1,745
1,795
1,790
1,890
1,810
1,845
1,835
1,480
1,690
1,495
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (uni
variable cost)" to 4 decimal places. Enter the "slope…
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is
concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were
higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's
profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the
previous fiscal year for maintenance costs and machine hours follow:
Month
1
3
4
6
7
8
9
10
11
12
Maintenance Costs Machine Hours
$ 2,665
2,710
2,760
2,860
2,895
3,045
2,905
2,945
2,820
2,610
2,630
2,930
Maintenance cost
1,566
1,670
1,685
1,735
1,855
1,890
1,865
1,885
1,775
1,450
1,630
1,465
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit
variable cost)" to 4 decimal places. Enter the…
Chapter 5 Solutions
Managerial Accounting
Ch. 5 - Define each of the following terms variable cost,...Ch. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - Describe the three methods used to estimate cost...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Which of the following increases when activity...Ch. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Consider the following information for a local...Ch. 5 - Prob. 5MCCh. 5 - Prob. 6MCCh. 5 - Prob. 7MCCh. 5 - Prob. 8MCCh. 5 - Prob. 9MCCh. 5 - Hathaway Corp, manufactures garden hoses. Last...Ch. 5 - Identifying Cost Behavior Heather Oak is trying to...Ch. 5 - Prob. 2MECh. 5 - Defining Cost Behavior Match each of the following...Ch. 5 - Prob. 4MECh. 5 - Defining Terms for the High-Low Method Indicate...Ch. 5 - Prob. 6MECh. 5 - Prob. 7MECh. 5 - Prob. 8MECh. 5 - Prob. 9MECh. 5 - Prob. 10MECh. 5 - Prob. 11MECh. 5 - Prob. 12MECh. 5 - Prob. 13MECh. 5 - Prob. 14MECh. 5 - Prob. 15MECh. 5 - Prob. 16MECh. 5 - Compare full absorption costing to variable...Ch. 5 - Identifying Cost Behavior Patterns Steve...Ch. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Estimating Cost Behavior Using High-Low Method...Ch. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Estimating Cost Behavior Using Scattergraph and...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Comparing High-Low Method and Least-Squares...Ch. 5 - Preparing Contribution Margin Income Statement...Ch. 5 - Determining Cost Behavior, Preparing Contribution...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Comparing Full Absorption Costing and Variable...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Prob. 1.1GAPCh. 5 - Prob. 1.2GAPCh. 5 - Prob. 1.3GAPCh. 5 - Prob. 1.4GAPCh. 5 - Prob. 1.5GAPCh. 5 - Prob. 1.6GAPCh. 5 - Prob. 2.1GAPCh. 5 - Prob. 2.2GAPCh. 5 - Prob. 2.3GAPCh. 5 - Prob. 2.4GAPCh. 5 - Prob. 2.5GAPCh. 5 - Prob. 2.6GAPCh. 5 - Prob. 2.7GAPCh. 5 - Prob. 3.1GAPCh. 5 - Prob. 3.2GAPCh. 5 - Prob. 3.3GAPCh. 5 - Prob. 3.4GAPCh. 5 - Prob. 3.5GAPCh. 5 - Prob. 4.1GAPCh. 5 - Prob. 4.2GAPCh. 5 - Prob. 4.3GAPCh. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Prob. 5.3GAPCh. 5 - Prob. 6.1GAPCh. 5 - Prob. 6.2GAPCh. 5 - Prob. 6.3GAPCh. 5 - Prob. 6.4GAPCh. 5 - Prob. 6.5GAPCh. 5 - Prob. 6.6GAPCh. 5 - Prob. 1.1GBPCh. 5 - Prob. 1.2GBPCh. 5 - Prob. 1.3GBPCh. 5 - Prob. 1.4GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 1.6GBPCh. 5 - Prob. 2.1GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 2.3GBPCh. 5 - Prob. 2.4GBPCh. 5 - Prob. 2.5GBPCh. 5 - Prob. 2.6GBPCh. 5 - Prob. 2.7GBPCh. 5 - Prob. 3.1GBPCh. 5 - Prob. 3.2GBPCh. 5 - Prob. 3.3GBPCh. 5 - Prob. 3.4GBPCh. 5 - Prob. 3.5GBPCh. 5 - Prob. 4.1GBPCh. 5 - Prob. 4.2GBPCh. 5 - Prob. 4.3GBPCh. 5 - Prob. 5.1GBPCh. 5 - Prob. 5.2GBPCh. 5 - Prob. 5.3GBPCh. 5 - Prob. 6.1GBPCh. 5 - Prob. 6.2GBPCh. 5 - Prob. 6.3GBPCh. 5 - Prob. 6.4GBPCh. 5 - Prob. 6.5GBPCh. 5 - Prob. 6.6GBP
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