Flexible Budget, Multiple Regression
The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table.
MonthOverhead CostsMachine HoursNumber of
SetupsNumber of
Purchase OrdersJanuary$ 32,2961,00020216February31,55093018250March36,2801,10021300April36,8671,05023270May36,7901,17022285June37,8001,20025240July40,0241,23527237August39,2561,19024303September33,8001,07020255October33,7791,21022195November37,2251,20723270December27,5001,08415150Totals$423,16713,4462602,971
Required:
1.Run a multiple regression equation using machine hours, number of setups, and number of purchase orders as independent variables. Prepare. a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the regression coefficients to the nearest cent and predicted overhead to the nearest dollar.)
If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all your answers as positive amounts.
Course Hero X X Cengage Log in X CengageNOWv2 | Online teachin X + https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator= &i... @ Chapter 9 eBook Print Item ? Flexible Budget, Multiple Regression The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table. Number Number of Overhead Machine of Purchase Month Costs Hours Setups Orders January 32,296 1,000 216 February 31,550 930 18 250 March 36,280 1,100 21 300 April 36,867 1,050 23 270 May 36,790 1,170 22 285 June 37,800 1,200 25 240 July 40,024 1,235 27 237 August 39,256 1,190 24 303 September 33,800 1,070 20 255 October 33,779 1,210 22 195 November 37,225 1,207 23 270 December 27,500 1,084 15 150 Totals $423,167 13,44 260 2,971 Required: 1. Run a multiple regression equation using machine hours, number of setups, and number of purchase orders as independent variables. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the regression coefficients to the nearest cent and predicted overhead to the nearest dollar.) If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all your answers as positive amounts. Check My Work Previous Save and Exit Assignment Score: 86.57% All work saved. Email Instructor Submit Assignment for Grading 12:32 PM Type here to search O 3/10/2021Cengage Log in X CengageNOWv2 | Online teachin X Course Hero X + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator= &i... Q Chapter 9 eBook Print Item Totals $423,167 13,446 260 2,971 ? Required: 1. Run a multiple regression equation using machine hours, number of setups, and number of purchase orders as independent variables. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the regression coefficients to the nearest cent and predicted overhead to the nearest dollar.) If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all your answers as positive amounts. Muir Company Flexible Budget for Overhead Month Predicted Overhead Actual Overhead Variance January 32,296 Favorable v February 31,550 Favorable v March 36,280 Unfavorable v April 36,867 Unfavorable v May 36,790 Favorable v June 37,800 V Favorable v July 40,024 Unfavorable v August 39,256 Unfavorable v September 83,800 Favorable v October 33,779 V Favorable v November 37,225 Favorable v December 27,500 Unfavorable v Totals 423,167 Favorable v Check My Work Previous Assignment Score: 86.57% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Type here to search O 12:32 PM 3/10/2021Cengage Log in X CengageNOWv2 | Online teachin X Course Hero X + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator= &i... @ Chapter 9 eBook Print Item ? 2. Now, suppose that the controller remembers that the factory throws two big parties each year, one for the 4th of July and the other for Christmas. Rerun the multiple regression with machine hours, number of setups, and number of purchase orders, and add a dummy variable called "Party." (This variable takes the value one for months with a factory-sponsored party, and zero otherwise.) Prepare a flexible budget for the 12 months using the results of this regression. (Round the regression coefficients to the nearest cent and each predicted overhead amount to the nearest dollar.) If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all your answers as positive amounts. Muir Company Flexible Budget for Overhead Month Predicted Overhead Actual Overhead Variance January $ Unfavorable v February Favorable v March Favorable v April Unfavorable v May Favorable v June Unfavorable v July Favorable v August Unfavorable v September Favorable v October Favorable v November Favorable v 108000 December Unfavorable v Total Unfavorable v Feedback Check My Work Previous Assignment Score: 86.57% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Type here to search O 12:32 PM 3/10/2021
