Multiple regression. Analysts for Golden Malt Brewery have selected the following cost drivers: volume of beer produced (in hectoliters, i.e.. 1 hL = 100 L), total amount of raw materials used (in kilograms), number of batches, volume of water used (in hL), number of cleaning procedures performed — cleanings in place (CIPs) —

and number of new products. Here are the cost data and levels of cost driver activity for 18 months.

Required:

a. Using multiple regression, find the cost-driver rates for each of the cost drivers.

b. Assuming the following level of cost-driver volume for the next month, what is ethset i measttei.m)

c. Golden Mall is considering a target for water consumption of 5.0 hL water per hL of beer produced. How much would Golden Malt have saved in total over the previous 18 m onths if it had reached this target in the previous 18 months?

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Beer Raw Number Month Total Overhead Produced Material of Water (hL) (kg) Batches (hL) CIPS New Products Jan.... $ 57,266.65 890 13,573 54 6,005 67 0 Feb. 61.020.23 980 15,013 58 6,588 72 1 Mar.... 64,622.52 1.094 16,781 65 7,336 81 0 Apr. 68,630.16 1,212 18.551 73 8,002 88 0 May 70,652.68 1,262 19.370 75 8.435 93 0 June... 79,927.29 1,494 23.182 89 9,940 110 2 July 82.867.34 1,557 24,202 95 10.420 106 3 Aug. 81,748.55 1,528 23,797 94 10,326 112 2 Sept. 68.819.71 1,215 18,537 12 8.284 87 0 Oct. 66,375.05 1,145 17,582 69 7,746 85 Nov.... 63.767.19 1,072 16.369 64 7,168 76 Dec.... 62.254.68 1,032 15,628 62 6,933 77 DOO 0 Jan... 56,837.54 872 13,158 50 5,902 61 1 Feb. 61,298.34 1,006 15,224 60 6.759 75 0 Mar... 63,179.60 1,041 15,763 62 6,990 81 1 Apr. 66.107.60 1,139 17.246 68 7,629 85 0 May 69,759.22 1,228 18,593 75 8.205 89 1 June... 76,402.53 1,397 21,571 84 9,304 100 2 Totals $1,221,536.88 21,164 324,140 1,269 141,972 1,545