NMAC Finance Accou..Government &MI; MINDTAP Sean Johnson 2 Excel Online 12.3 Mic
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NMAC Finance Accou..Government &MI; MINDTAP Sean Johnson 2 Excel Online 12.3 Microsoft Excel: Structured Activity ue on Dec 3 at 11:59 PM CST HOME INSERT DATA REVIEW Question 1 0010 Excel Online Struct ured Activity: Regression Equations and the Coefficient of Determination An important application of regression analysis in accounting is in the estimation of cost. By collecting data on valume and cost and using the least squares method t and cost, an accountant can estimate the cost associated with a particular manufacturing volume. 1ProductionVolume(unit400 Total Cost($) 3700 4700 5100 5600 6100 6700 o develop an estimated regression equation relating volume 450 550 600 In the Microsoft Excel Online file below you will ind a sample of production volumes and total cost data for a 4. manufacturing operation, Conduct a regression analysis to explore the relationship between production volume and then answer the questions that follow 750 Open spreadsheet a. Compute bi and bo (to 1 decimal) 10 Production Target Est. Cost (S) 500 12 13 14 15 16 17 18 19 20 Compiete the estimated regression equation (to 1 decimal). b. According to this model, what is the change in cost (in dollars) for every unit produced (to 1 decimal)? c. Compute the coefficient of determination (to 3 decimals). Note: report r between 0 and 1 What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? 23 24 25 26 27 d. The company's production schedule shows 500 units must be produced next manth. What is the estimated total cost for this operation (to the nearest whole number)? 29Explanation / Answer
a)
b1 = 7.6
b0 = 946.6
b)
y = 7.6x + 946.6
c)
r^2 = 0.958
95.8%
d)
y = 7.6*500 + 946.6 = 4746.6
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