CTIVE 4 Problem 8.40 Flexible Budget appropriate drivers for use in flexible budgeting. She decided to concentrate months since that time period was one in which there was little important chan product lines, and so on. Data on overhead costs, number of ma and number of purchase orders are in the following table. The controller for Muir Company's Salem plant is analyzing overhead in order to on the past y e in techn chine hours, number of Number of Purchase Orders Number of Setups 20 18 Overhead Costs S 32,296 31,550 36,280 36,867 36,790 37,800 40,024 39,256 33,800 33,779 37,225 27,500 Machine Hours 1,000 930 1.100 1,050 1,170 1,200 1,235 1,190 1,070 1,210 1,207 1,084 13,446 Month 216 January February March April May June 250 300 270 285 240 237 303 255 23 25 Lu August September October November 23 270 December Totals $423,167 260 2971 Required: l. Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. (Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.) Use this rate to predict overhead for each of the 12 months. Run a regression equation using only machine hours as the independent variable. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation 2. (Round the intercept and x-coefficient to the nearest cent and predicted overhead to li nearest dollar.) Is this flexible budget better than the budget in Requirement 1? Why or not? a. Predict for 1,500 machine hours based on average a. Predict for 1,500 machine hours based regression analysis (flexible budget) SUMMARY OUTPUT Regression Statistics Multiple R 0.636214 R Square 0.404768 Adjusted f 0.345245 Standard I 2907.611 Observati 12 ANOVA df MS F gnificance F Regressior Residual Total 1 57490070 57490070 6.800179 0.026143 10 84541989 8454199 11 1.42E+08 r 95%ower 95.09 15 -14074.9 31474.16 -14074.9 9.0913 2.607715 0.026143 3.450844 43.9642 3.450844 r 95.0% Coefficientandard Erri t SttP-value Lower 31474.16415 Intercept 8699.636 10221.32 0.851126 0.4146 X Variable 23.70752 43.96420365