This paper circulates around the core theme of Based on the results from the three regression analyses determine which correlation provides the best estimate of the total cost equation. Explain why you selected the correlation that you did. together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Following is a Monthly Income Statement, based on absorption costing, for Performance Drinks:
You
begin to wonder if there would be any value in repackaging the income
statement in a way that would report Contribution Margin as opposed to
Gross Margin. You know that in order to report Contribution Margin you
will need to understand your costs as variable and fixed. Unfortunately
the general ledger does not specifically report costs as variable and
fixed. You remember learning that regression analysis can be used to
generate data that can be used to create a total cost equation. With the
total cost equation we can understand our total cost as the sum of
fixed costs and variable costs. After doing some research your collect
the following data related to overhead and possible causal factors:
Requirement #1
Using the data above, which has also been provided electronically in Excel, run the following regression analyses:
• Linear regression analyzing total overhead cost and units sold
• Linear regression analyzing total overhead cost and machine hours used
• Multiple regression analysis analyzing total overhead cost along with both units sold and machine hours used
Requirement #2
Based
on the results from the three regression analyses determine which
correlation provides the best estimate of the total cost equation.
Explain why you selected the correlation that you did.
