Consider Valley Dentals cost equation results obtained in E5-6 using least-squares regression. Required: 1. Determine Valley Dentals
Question:
Consider Valley Dental’s cost equation results obtained in E5-6 using least-squares regression.
Required:
1. Determine Valley Dental’s contribution margin per unit and contribution margin ratio if it charges \($45\) for each cavity filled.
2. Prepare a contribution margin income statement for October assuming Valley expects to fill 610 cavities during the month.
Data from E5-6
Refer to the information in E5-4 regarding Valley Dental.
Perform a least squares regression using Valley’s activity and cost information and state the linear cost equation (Y = A + BX).
Explain what each component of the cost equation represents.
Do the regression results differ from those obtained using the high-low and scattergraph methods? If so, why?
Data from E5-4
Valley Dental Services is a specialized dental practice whose only service is filling cavities. Valley has recorded the following for the past nine months.
Step by Step Answer:
Managerial Accounting
ISBN: 9780078110771
1st Edition
Authors: Stacey WhitecottonRobert LibbyRobert Libby, Patricia LibbyRobert Libby, Fred Phillips