Question
hane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel.
hane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:
Month | Machine Hours | Electricity Costs | ||
January | 2,500 | $ | 19,200 | |
February | 2,900 | $ | 22,600 | |
March | 1,900 | $ | 14,300 | |
April | 3,100 | $ | 24,600 | |
May | 3,800 | $ | 29,050 | |
June | 3,300 | $ | 23,600 | |
July | 4,100 | $ | 25,550 | |
August | 3,500 | $ | 23,550 | |
September | 2,000 | $ | 17,100 | |
October | 3,700 | $ | 27,600 | |
November | 4,700 | $ | 32,600 | |
December | 4,200 | $ | 28,550 | |
Summary Output | |
Regression Statistics | |
Multiple R | 0.956 |
R Square | 0.914 |
Adjusted R2 | 0.905 |
Standard Error | 1,615.39 |
Observations | 12.00 |
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | |
Intercept | 4,974.43 | 1,907.43 | 2.61 | 0.03 | 724.41 | 9,224.45 |
Machine Hours | 5.76 | 0.56 | 10.30 | 0.00 | 4.51 | 7.00 |
If the controller uses regression analysis to estimate costs, the estimate of the variable portion of electricity costs is:
Multiple Choice
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Electricity Costs = $0.91 Machine-hours.
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Electricity Costs = $0.56 Machine-hours.
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Electricity Costs = $5.76 Machine-hours.
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Electricity Costs = $10.30 Machine-hours.
The following information pertains to Tiller Co.:
Sales | $ | 740,000 |
Variable Costs | 148,000 | |
Fixed Costs | 35,200 | |
What is Tiller's break-even point in sales dollars? (CPA adapted) (Round intermediate calculation to 2 decimal places)
Multiple Choice
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$183,200.
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$148,000.
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$35,200.
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$44,000.
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