Bildt-stersund AN wishes to set a flexible budget for its power costs, which are primarily a function
Question:
Bildt-Östersund AN wishes to set a flexible budget for its power costs, which are primarily a function of machine-hours worked. Data for the first four periods follows:
Required
1. Plot the relationship between power costs and machine-hours.
2. Calculate the constant a and slope coefficient b of the function y = a + bX using (i) the high–low approach, and (ii) the regression approach. Comment on the results.
3. For the regression approach, calculate the coefficient of determination, r2 . Comment on the result.
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Step by Step Answer:
To plot the relationship between power costs Y and machinehours X we can create a scatter plot using the provided data Period Power costs Y Machinehours X 1 Skr350 200 2 450 300 3 300 100 4 500 400 Sc...View the full answer
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Related Book For 
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
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