Landis Company uses a job-order costing system with a predetermined plantwide overhead rate based on direct labor- hours. In an effort to improve its ability to measure job profitability and make decisions, the company is considering allocating some of its overhead costs, such as electrical costs, based on machine-hours instead of direct labor-hours. To further explore the potential benefits of this approach, the company has gathered the following eight weeks of actual (not estimated) data with respect to its electrical costs: Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Total Machine-Hours 7,700 8,900 8,600 8,100 7,600 7,100 5,500 6,800 60,300 Direct Labor- Hours 8,910 8,920 8,870 8,840 8,990 8,940 8,870 8,910 71,250 Electrical Costs $ 76,200 83,800 81,000 80,800 79,400 70,700 61,500 73,900 $607,300 Using the data above, the company translated these actual amounts into annual estimates as follows: Total for eight weeks (a) 52 weeks 8 weeks (b) Annual estimate (a) * (b) Machine-Hours 60,300 6.5 391,950 Direct Labor- Hours 71,250 6.5 463,125 Electrical Costs $ 607,300 6.5 $3,947,450 Regression Analysis Machine- Electrical Week 1 2 3 Direct Labor- Hours 8,910 $ 8,920 $ 8,870 $ 8,840 $ 8,990 $ 8,940 $ 8,870 $ 8,910 $ Hours 7,700 8,900 8,600 8,100 7,600 7,100 5,500 6,800 4 Costs 76,200 83,800 81,000 80,800 79,400 70,700 61,500 73,900 5 6 7 8 5. Refer to the eight weeks of actual data included in the Excel template. a. Use least-squares regression to estimate the fixed electrical cost per week and the variable electrical cost per machine-hour. (You can refer to Appendix 5A of the text for a brief illustration of the method being used to perform the regression computations.) b. What is the R2 for the regression line in requirement 5a? c. What does the R2 tell us? Complete this question by entering your answers in the tabs below. Req 5A Req 5B Req 5C Use least-squares regression to estimate the fixed electrical cost per week and the variable electrical cost per machine-hour. (You can refer to Appendix 5A of the text for a brief illustration of the method being used to perform the regression computations.) (Round the estimated variable cost per machine hour to two decimal places.) The estimated fixed electrical cost per week is The estimated variable electrical cost per machine-hour is What is the R2 for the regression line in requirement 5a? (Round your answer to four decimal places.) The R2 is What does the R2 tell us? Olt tells us the percentage of variation in the dependent variable (electrical cost) explained by variation in the independent variable (machine-hours). Olt tells us the percentage of variation in the dependent variable (machine-hours) explained by variation in the independent variable (electrical cost). Olt tells us the percentage of variation in the independent variable (electrical cost) explained by variation in the dependent variable (machine-hours). Olt tells us the percentage of variation in the independent variable (machine-hours) explained by variation in the dependent variable (electrical cost)