5-33. Methods of Estimating Costs: Simple Regression Simple regression results from the data of Adriana Corporation (Exercise 5-30) are as follows: Equation: Overhead $206,469 + ($45.83 x Machine-hours) Statistical data Correlation coefficient.. R 962 .925 Required Estimate overhead if the company expects the plant to operate at a monthly average of 9,000 machine-hours next year. 5-35. Methods of Estimating Costs: Multiple Regression Multiple regression results from the data of Adriana Corporation (Exercise 5-30) are as follows: Equation: $124,570 + ($31.93 x Labor-hours) + Required Overhead ($41.10 x Machine-hours) Statistical data Correlation coefficient. R... .982 .964 Estimate overhead using the multiple regression results, assuming that the company expects the plant to operate at a monthly average of 9,000 machine-hours and 3,000 labor-hours next year. 5.30. Methods of Estimating Costs High-Low Adriana Corporation manufactures football equipment. In planning for next year, the man- agers 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 Month Labor Hours Machine-Hours Overhead Costs 3.625 6.775 $513,435 2 3.575 2035 518,960 3,400 7600 549,575 3,700 7265 541,400 3,900 2955 581,145 3,775 7,895 572,320 7 3,700 6,950 535,110 3.625 6.530 510,470 3.550 7270 532,195 10 3,975 7725 565,305 11 3.375 6,490 503,775 12 3.550 8,020 564,210 Required Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours & Managers expect the plant to operate at a monthly average of 7,500 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? y Overhead cost 5-27. Methods of Estimating Costs: Account Analysis The accounting records for Frankie's Fixtures report the following production costs for the past year: Direct materials... Direct labor... Variable overhead.. $420,000 350,000 308,000 Production was 210,000 units. Fixed manufacturing overhead was $480,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manu- facturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. Required a. Prepare a cost estimate for a volume level of 220,000 units of product this year. b. Determine the costs per unit for last year and for this year. 1) Total cost 2) Cost per unit last year 3) Cost per unit this year 00