Simple regression results from the data of Lecouvreur Corporation (Exercise 5-25) are as follows:

Data from in Exercise 5-25

Lecouvreur Corporation manufactures soccer equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year’s operations:

Required Estimate overhead if the company expects the plant to operate at a monthly average of 1,800 machine-hours next year.

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Equation: Overhead $41,293 + ($45.83 x Machine-hours) Statistical data Correlation coefficient R2 .962 .925