Budget Analysis I: A budget is an expression of management's expectations and goals concerning future revenues and costs. To increase their effectiveness, many budgets are flexible, including allowances for the effect of variation in uncontrolled variables. For example, the costs and revenues of many production plants are greatly affected by the number of units produced by the plant during the budget period, and this may be beyond a plant manager's control. Standard cost-accounting procedures can be used to adjust the direct-cost parts of the budget for the level of production, but it is often more difficult to handle overhead. In many cases, statistical methods are used to predict or forecast overhead from the level As a simple example, consider the historical data for a certain plant. Enter the data into EXCEL and analyze it to answer the following items. production using historical data. 6 7 8 9 10 11 13 11.8 14 16 15.5 15.1 17.2 Production (in 10,000) units: 5 Overhead costs (in $1,000): (a) Construct a scatterplot of y versus x. 17 16 15 12 5 16 15 13 11 6 8 9 10 11 5 6 7 8 9 10 11 18 17 16 15 14 EE 18 17 16 15 14 13 12 11 12 5 6 9 11 6 7 9 10 11 (b) State the model equation. O OVERHEAD = + PRODUCTION O OVERHEAD = B, PRODUCTION O PRODUCTION = B + BOVERHEAD OVERHEAD = B + BPRODUCTION O PRODUCTION = 3, OVERHEAD O PRODUCTION=B + BOVERHEAD In the model equation above, what does OVERHEAD represent? The predicted value of the independent variable O The predicted value of the response variable The predicted value of the explanatory variable The predicted value of the predictor variable In the model equation above, what does , represent? O The slope associated with the explanatory variable The explanatory variable O The model intercept The response variable Activate Windows Go to Settings to activate Windows.