Question

QUESTION 27 *REGRESSION-ESTIMATION

AN IMPORTANT APPLICATION OF REGRESSION IN MANUFACTURING IS THE ESTIMATION OF COST OF PRODUCTION. BASED ON DATA FROM AJAX WIDGETS RELATING COST (Y) TO VOLUME (X), WHAT IS THE COST PER WIDGET?

Production Volume (units) | Total Cost ($) |

400 | 4688 |

450 | 4893 |

550 | 5957 |

600 | 6105 |

700 | 7111 |

750 | 7743 |

425 | 4983 |

475 | 5461 |

575 | 6136 |

625 | 6302 |

725 | 7538 |

775 | 7596 |

Answer #1

Minitab steps to obtain the Cost per Widget:

Step 1. Enter the data of Production Volume (units) and Total Cost ($) in Minitab columns.

Step 2. Click on Stat>Regression>Regression.

Step 3. Selcet Total Cost ($) in Response and Production Volume (units) in Predictors.

Step 4. Click OK.

The output is given below:

Therefore, the cost per widget is $8.2145.

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,000
450
5,000
550
5,400
600
5,900
700
6,400...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,500
450
5,500
550
5,900
600
6,400
700
6,900...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,000
450
5,000
550
5,400
600
5,900
700
6,400...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,400
450
5,400
550
5,800
600
6,300
700
6,800...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production
Volume (units) Total Cost ($)
400 4,300
450 5,300
550 5,700
600 6,200
700 6,700...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume (units)
Total Cost ($)
400
4,500
450
5,500
550
5,900
600
6,400
700
6,900...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production Volume
(units)
Total Cost
($)
400
4000
450
5000
550
5400
600
5900
700
6400...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
Production
Volume
(units)
Total Cost
($)
400
4,100
450
5,100
550
5,300
600
5,800
700
6,300...

An important application of regression analysis in accounting is
in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume.
In the Microsoft Excel Online file below you will find a sample
of production volumes and total cost data for a manufacturing
operation. Conduct a regression analysis to explore the
relationship...

An important application of regression analysis is the
estimation of cost, particularly the effect of production volume on
total cost. The following data come from a company which has kept
track of production volume and total cost at several different
levels of production.
Production volume (units)
Total cost ($)
400
4000
450
5000
550
5400
600
5900
700
6400
750
7000
Use these data to estimate a regression designed to capture the
effect of production volume on the total cost....

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