Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

All requirements please!! Kim Battle, owner of Rose Red, operates a local chain of floral shops. Each shop has its own delivery van. Instead of

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

All requirements please!!

Kim Battle, owner of Rose Red, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Battle wants to set the delivery fee based on the distance driven to deliver the flowers. Battle wants to separate the fixed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has the following data from the past seven months: E: (Click the icon to view the data.) Read the fequirements. Use Microsoft Excel to run a regression analysis, then do the following: 1. Determine the company's cost equation (use the output from the Excel regression). 2. Determine the R-squared (use the output from the Excel regression). What does Rose Red's R-squared indicate? 3. Predict van operating costs at a volume of 15,500 miles assuming the company would use the cost equation from the Excel regression regardless of its R-squared. Should the company rely on this cost estimate? Why or why not? Month Miles Driven Van Operating Costs January. 16,000 $5,490 17,500 $5,700 14,900 February March .... April May ... $4,910 $5,340 16,200 16,900 $5,820 June 15,100 $5,410 July ... 14,500 $4,920 Requirement 1. Determine the company's cost equation (use the output from the Excel regression). (Round the amounts to two decimal places.) y = X +

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

3rd Edition

0136946690, 978-0136946694

More Books

Students also viewed these Accounting questions

Question

=+f. Does it promise a benefit or solve a problem?

Answered: 1 week ago

Question

=+ Why do some seem like a personalized, individual message?

Answered: 1 week ago