c-1. Using Excel, calculate the simple regression of operating costs on cases shipped and enter the regression coefficients.
c-2. Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a simple regression of operating costs on cases shipped.
d-1. Enter the regression coefficients.
d-2. Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a multiple regression of operating costs on cases shipped and the price level. Assume a price level of 136 for next month.
Caiman Distribution Partners is the Brazilian distribution company of a U.S. consumer products firm. Inflation in Brazil has made bidding and budgeting difficult for marketing managers trying to penetrate some of the country's rural regions. The company expects to distribute 450,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows. Account Supplies Supervision Truck expense Building leases Utilities Warehouse labor Equipment leases Data processing equipment Other Total Operating Cost $ 435,000 220,000 1,240,000 858,000 233,000 850,000 755,000 937,000 830,000 $6,358,000 Behavior All variable $135,000 Fixed $ 201,000 Fixed $568,000 Fixed $ 138,000 Fixed $130,000 Fixed $605,000 Fixed All fixed $404,000 Fixed Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate information from a published index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business. Following instructions from the corporate offices, the controller's office in Brazil collected the following information for monthly operations from last year. Month NOOC UWNP Cases 330,000 374,000 347,000 376,000 368,000 395,000 367,000 423,000 380,000 412,000 406,000 425,000 Price Index 112 121 114 115 127 121 136 Operating costs $5,699,141 5,806,640 5,849,907 5,927,619 5,939,137 6,043,366 5,918, 497 6,133,870 6,126,132 6,186,627 6,208,801 6,362,257 132 141 141 138 130 These data are considered representative for both past and future operations in Brazil. Required: a-1. Determine the variable cost per case assuming that 450,000 cases will be shipped next month based on the controller's analysis of accounts. (Round your answer to 2 decimal places.) a-2. Prepare an estimate of operating costs. a-1. Variable cost per case a-2. Estimate of operating cost b. Use the high-low method to compute an estimate of operating costs assuming that 450,000 cases will be shipped next month. (Round variable cost to 5 decimal places. Round intermediate calculations and final answer to nearest whole dollar amount.) Estimate of operating cost Using Excel, calculate the simple regression of operating costs on cases shipped and enter the regression "Intercept" to nearest whole dollar amount. Round the case coefficient to 5 decimal places.) Intercept Cases Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a simple regression of operating costs on cases shipped. (Round variable costs per unit to 5 decimal places. Round the intercept and final answer to the nearest whole dollar amount.) Estimate of operating cost Enter the regression coefficients. Run a multiple regression analysis based on operating costs on cases shipped and the price level. (Round "Cases" to 5 decimal places and "Price Index" to 5 decimal places.) Intercept Cases Price Index e. Select the most appropriate estimate for the given circumstances. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) High-low method Controller's analysis Simple regression Multiple regression
