E5-24 (Algo) Estimating Cost Behavior Using Least-Squares Regression and High-Low Method [LO 5-3, 5-4) Tempe Office Services and Supplies (TOSS) provides various products and services in the Tempe Research Park, home to numerous high-tech and bio-tech companies. Making color copies is one of its most popular and profitable services. The controller performed a regression analysis of data from the Color Copy Department with the following results: Intercept Rsquare Number of observations x coefficient 404.732219 0.936142 6 0.063191 The regression output was based on the following data: Number of Color Month Copies July 17,300 August 18,100 September 20, 250 October 24,300 November 20,950 December 19,000 Color Copy Department Costs $ 1,510 1,480 1,685 1,930 1,735 1,665 Required: 1. What is the variable cost per color copy for TOSS? 2. What is the fixed cost for the Color Copy Department? 3. Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department? Enter answer as an equation in the form of y= a + bx. 5-a. Use the high-low method to estimate the variable and fixed costs for the Color Copy Department. 5-b. What cost formula should be used based on your analysis? Enter answer as an equation in the form of y= a + bx. 6. If 21,600 copies are made during January, what is the total cost predicted by each method? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req 5a Req 5b Req6 What is the variable cost per color copy for TOSS? (Enter your answer in cents, rounded to 1 decimal place (i.e., $0.076 should be entered as 7.6)). Variable Cost per color copy (in cents) Reg 1 Reg 2 > Req 1 Reg 2 Req 3 Req 5a Req 5b Reg 6 What is the fixed cost for the Color Copy Department? (Round your answer to 2 decimal places.) Fixed Cost per Month. Req 1 Reg 2 Reg 3 Req 5a Req 5b Req 6 Based on the regression output obtained by the controller, what cost formula should be used to estimate future total costs for the Color Copy Department? Enter answer as an equation in the form of y = a + bx. (Round your fixed costs to 2 decimal places and your variable cost per unit to 3 decimal places.) (per Number of Color Copies) Total Cost + Reg 1 Reg 2 Reg 3 Req 5a Req 5b Reg 6 What cost formula should be used based on your analysis? Enter answer as an equation in the form of y = a + bx. (Round your intermediate calculations and your final answers to 2 decimal places.) Total Cost (per Number of Color Copies) Req 1 Reg 2 Reg 3 Req 5a Reg 5b Reg 6 If 21,600 copies are made during January, what is the total cost predicted by each method? (Use the answers that you provided in parts 3 and 5-b and round your final answers to 2 decimal places.) Total Cost Regression High-Low
