Question
Crazy Cases has a small kiosk in the local mall, they sell cellphone cases and accessories. The company has the following actual data for 2012,
Crazy Cases has a small kiosk in the local mall, they sell cellphone cases and
accessories. The company has the following actual data for 2012, the kiosk opened
in early April.
Month
Production
(Units)
Overhead
Costs
Apr 5,000 12,000
May 5,750 16,000
Jun 7,500 18,500
Jul 7,750 19,750
Aug 12,000 27,000
Sep 11,500 26,500
Oct 10,000 20,000
Nov 6,000 17,750
Dec 5,500 14,250
1. Estimate the cost function for Overhead Costs using high/low method.
2. Using the information provide on next page, what is the cost function based
on the regression analysis. What does the R Square value tell you?
SUMMARY
OUTPUT
Regression Statistics
Multiple R 0.9524
R Square 0.9070
Adjusted R Square 0.8938
Standard Error 1645.89
Observations 9
ANOVA
df SS F
Significance
F
Regression 1 185162107 68.35111 7.3841E-05
Residual 7 18962893.01
Total 8 204125000
Coefficients Standard Error t Stat Pvalue
Intercept 4835.270369 1808.608 2.67 0.031838873
X Variable 1 1.80609248 0.218457 8.26 7.3841E-05
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