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What is the variable cost per employee Degen Company used least squares regression analysis to obtain the following output: Payroll Department Cost Explained by Number of Employees Constant $7,540 Standard error of Y estimate 819 r2 0.8924 Number of observations 20 X coefficient(s) $2.473 Standard error of coefficient(s) 0.0966 Required: a. What is the total fixed cost? b. What is the variable cost per employee? c ...

Other / Other 30 Mar 2016

Which equation should be selected for the analysis Arfaei Company manufactures chairs. Because the efforts of manufacturing are approximately equal between labor and machinery, management is considering other possible cost drivers. By considering different cost drivers, it is anticipated that the estimating process can be improved. The following cost estimating equations with their r2 values have been determined for 20X5: 1. X = cutti ...

Other / Other 30 Mar 2016

The ideal database for estimating cost functions 1) The ideal database for estimating cost functions contains ________. A) numerous cost driver observations B) only the independent variable and not the dependent variable C) cost driver observations spanning a narrow range D) a few values of the cost driver that are grouped closely together 2) Data collection problems arise when ________. A) data are recorded electronically rat ...

Other / Other 30 Mar 2016

Multicollinearity exists in multiple regression 1) The coefficient of determination (r2) measures the percentage of variation in X (the independent variable) explained by Y (the dependent variable). 2) Generally a coefficient of determination (r2) of 0.30 or higher passes a goodness of fit test. 3) Goodness of fit has meaning only if the relationship between the cost drivers and costs is economically plausible. 4) Multicolli ...

Other / Other 30 Mar 2016

Jake's Copy Center hires a new employee Jake's Copy Center hires a new employee. Jake knows he has to be patient with the employee until the employee gains enough experience to meet production standards. Jake is unsure of the learning curve in his operation, but he knows the first job by a new employee averages 50 minutes and the second job averages 40 minutes. Assume all jobs to be equal in size. Required: a. What is the learning-cu ...

Other / Other 30 Mar 2016

Misinterpretation of data can arise when fixed costs are reported 1) Data collection problems can arise when extreme values of observations occur. 2) Misinterpretation of data can arise when fixed costs are reported on a per unit basis. 3) Inflation can distort data that are compared over time so purely inflationary effects should be removed. 4) Fixed costs are sometimes allocated to individual products as part of the stand ...

Other / Other 30 Mar 2016

What are some of the potential problems that may be encountered Roger Moon has just purchased the film studio of a movie company that specializes in comedies. He found that the company did not try to estimate the cost of making a movie. Instead, it just gave the producer a budget and told him/her to make a movie within budget. Mr. Moon does not like the former movie-budget concept and desires to establish a formal cost estimation system. ...

Other / Other 30 Mar 2016

A major concern that arises with multiple regression 1) The coefficient of determination is important in explaining variances in estimating equations. For a certain estimating equation, the unexplained variation was given as 22,506. The total variation was given as 51,150. What is the coefficient of determination for the equation? A) 0.34 B) 0.43 C) 0.56 D) 0.75 2) The Perize Corporation used regression analysis to predict the a ...

Other / Other 30 Mar 2016

What are the estimating equations for each cost driver Schotte Manufacturing Company uses two different independent variables (machine-hours and number of packages) in two different equations to evaluate costs of the packaging department. The most recent results of the two regressions are as follows: Machine-hours: Variable Coefficient Standard Error t-Value Constant $748.30 $341.20 2.19 Independent Variable $52.90 $35.20 1.50 ...

Other / Other 30 Mar 2016

What is the time for a new employee to build 16 units Each time Mayberry Nursery hires a new employee, it must wait for some period of time before the employee can meet production standards. Management is unsure of the learning curve in its operations but it knows the first job by a new employee averages 40 hours and the second job averages 32 hours. Assume all jobs to be equal in size. Required: a. What is the learning-curve percent ...

Other / Other 30 Mar 2016