Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How do I get these answers? Kara Meyer, owner ofTulipTime, operates a local chain of floral shops. Each shop has its own delivery van. Instead

How do I get these answers?

Kara Meyer, owner ofTulipTime, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat deliveryfee,Meyer wants to set the delivery fee based on the distance driven to deliver the flowers.Meyer wants to separate the fixed and variable portions ofher van operating costs so thatshe has a better idea how delivery distance affects these costs.

She has the following data from the past sevenmonths:

Month Miles Driven Van Operating Cost

January 16000 $5490

February 17500 $5700

March 14900 $4910

April 16200 $5340

May 16900 $5820

June 15100 $5410

July 14500 $4920

Requirement 1.Determine thecompany's cost equation(use the output from the Excelregression).(Round the amounts to two decimalplaces.)

y = $ x + $

Requirement 2.Determine theR-square (use the output from the Excelregression).

TheR-square is

What doesTulipTime's R-square indicate?

Requirement 3.Predict van operating costs at a volume of17,000miles assuming the company would use the cost equation from the Excel regression regardless of itsR-square. Should the company rely on this costestimate? Why or whynot?(Round your answer to the nearestcent.)

The operating costs at a volume of 17,000 miles is $

Should the company rely on this costestimate? Why or whynot?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

4th edition

1259964957, 1260413985, 1260565440, 978-1260413984

More Books

Students also viewed these Accounting questions

Question

Chacon University potential problems in an ERP implementation.

Answered: 1 week ago

Question

2. In what way can we say that method affects the result we get?

Answered: 1 week ago