Lesie Sporting Goods is a locally owned store that specializes in printing tearn

Question

Lesie Sporting Goods is a locally owned store that specializes in printing tearn jerseys. The majonity of its business comes from orders for various Iccal teams and organzations. Whie Leslie's prints basoball and sofball teamjersoys aro the company's biggest source of revonue. everything from bowing beam jerseys to fraternity'scrority apparel to special event shirts, summer league A portion of Leslie's operaing information for the company's last year folows: Number of Month Printed Cost January 5 $4,870 Fabruary 205 5,830 March Apri May June 435 6.030 195 5.735 510 8.665 615 9250 685 9730 August 325 6.030 September 380 6175 October 25970 November 250 5925 December 190 4945 Required: 3. Using the high-low method, calculate the store's total ixed operating costs and varable operaing cost per jersay (Do not round your intermediate calculations. Round your "Variable Cost" answer to 2 decimal places and "Fixed Cost" answer to the nearast whole number) Variable Cost 4. Uang te high-low method results, oalculate the store s expected operat ng coat fit prnted 420 erseys. (Do not round your intermediato calculations. Round your answer to the nearest whole number.) . Perform a least-squares regression analysis on Leslie's data. (Use Microsoft Excel or a statistical package to find the coefficients using least-squares regression. Round your answers to 2 decimal places.) on Leslies oft Exoel or answers to 6. Using the regression output, create a linear oquatonx) or estimating Leslie's operating costs. (Round your answers to 2 decimal placos.) 7. Using the least-squares regression results, caloulate the store's expected operating cost if it prints 650 jerseys. (Round your intermediate calculations to 2 decimal places. Round your final answer to 2 decimal places.)

Explanation / Answer

3. Calculation of fixed and variable cost per unit using high - low method: Variable cost = (Y2 - Y1) / (X2 - X1) Where, Y2 = total cost at highest level of activity Y1 = total cost at lowest level of activity X2 = units at highest level of activity X1 = units at lowest level of activity Thus, variable cost = {($9,730- $4,870)/(685-185)} = $9.72 Hence, fixed cost = total cost - (number of units * variable cost) =$9,730 - (685 * $9.72) = $3071.80 4. Operating cost at 420 units is calculated as follows: =(number of units * variable cost per unit) + fixed cost = (420 * $9.72) + $3071.80 = $7154.20 5. Calculation of variable and fixed cost using least squares regression method: Variable cost = n?xy - ?x?y ÷ n ?x² - (?x)² Fixed cost = (?y - variable cost × ?x) ÷ n Number Number of Jerseys Printed Operating Cost X² XY X Y 1 185 4,870 34225 900950 2 205 6,830 42025 1400150 3 195 5,735 38025 1118325 4 510 8,685 260100 4429350 5 615 9,250 378225 5688750 6 685 9730 469225 6665050 7 435 6250 189225 2718750 8 325 6030 105625 1959750 9 380 6175 144400 2346500 10 265 6970 70225 1847050 11 260 6925 67600 1800500 12 190 4945 36100 939550 Total 4,250 82,395 18,35,000 3,18,14,675 where n = 12 Variable cost = {[(12 × 31814675) - (4250× 82395)] ÷ [(12 × 1835000) - 4250 ²]} = $7.98 per unit Fixed cost = (?y - variable cost × ?x) ÷ n = (82395 -7.98 × 4250) / 12 = $4040 6. Linear equation = Y = a + b X where a = fixed cost and b = variable cost Y = $4040 + $7.98 X 7. At 650 units, operating cost will be as follows: Y = $4040 + $7.98*650 = $927

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.