Hello would u like to explain to how to run the regressions?
Sorrentino Company 50.50 of direct labor. 30 jars of sauce can be produced per machine hour. The production manager believes that with careful scheduling, he can keep the total number of setups (for Sorrentino Company, which has been in business for one year, manufactures specialty both pasta and sauce) to the same number as used last year. The marketing director Italian pastas. The pasta products start in the mixing department, where durum flour, expects to increase selling expense by $25,000 per year to promote the new product and eggs, and water are mixed to form dough. The dough is kneaded, rolled flat, and cut into believes Sorrentino Company can sell two boxes of pasta for every one jar of sauce. fettucine or lasagna noodles, then dried and packaged Required: Paul Gilchrist, controller for Sorrentino Company, is concerned because the company has yet to make a profit. Sales were slow in the first quarter but really picked up by the end of 1. Separate overhead into fixed and variable components using regression analysis. Run the year. Over the course of the year, 718,200 boxes were sold. Paul is interested in three regressions, using the following independence variables: (a) number of setups, determining how many boxes must be sold to break even. He has begun to determine (b) number of machine hours, and (c) a multiple regression using both number of relevant fixed and variable costs and has accumulated the following per unit data: setups and machines. Which regression equation is best? Why? 2. Using the results from (1) above, calculate the number of boxes of pasta which must Price $0.90 be sold to break even before the expansion into the production of sauces Direct materials 0.35 3. Now consider the production of sauces. Using the results of multiple regression Direct labor 0.2: equation, calculate the break-even number of boxes of pasta and jars of sauce. 4. Suppose that the production manager is wrong and that the number of setups doubles. He has had more difficulty separating overhead into fixed and variable components. In Calculate the new break-even number of boxes of pasta and jars of sauce. examining overhead-related activities, Paul has noticed that machine hour appear to be 5. Refer to the original data. Suppose that only 30 jars of sauce can be produced per closely correlated with units in that 100 boxes of pasta can be produced per machine hour. machine hour and that Sorrentino Company will sell 3 boxes of pasta for every one jar Setups are important batch-level activity. Paul has accumulated the following information of sauce. Calculate the new break-even number of boxes of pasta and jars of sauce. on overhead costs, number of setups, and machine hours for the past 12 months. 6. Explain how uncertainty in the sales mix and in cost estimates affect the break-even points for Sorrentino Company. Month Overhead Number of Setups Machine Hours January $5.700 18 595 February 4,500 6 560 March 4,790 12 575 April 5,500 15 615 May 6,240 20 660 June 5,100 10 552 July 5,532 16 630 August 5,409 12 602 September 5.300 11 635 October 5.000 12 550 November 5,450 14 582 December 5,470 14 615 Selling and administrative expenses, all fixed, amounted to $175,000 last year. In the second year of operations, Sorrentino Company has decided to expand into the production of sauces to top its pastas. Sauces are also started in the mixing department, using the same equipment. The sauces are mixed, cooked, and packaged into plastic containers. One jar of sauce is priced at $2 and required $0.75 of direct materials and
