Problem 5-57 Interpretation of Regression Results: Simple Regression (LO 5-5) Your company provides a variety of delivery services. Management wants to know the volume of a particular delivery that would generate $10,800 per month in operating profits before taxes. The company charges $20 per delivery. The controller's office has estimated overhead costs at $9,000 per month for fixed costs and $12 per delivery for variable costs. You believe that the company should use regression analysis. Your analysis shows the results to be: Monthly overhead = $22,406 + $10.69 per delivery Your estimate was based on the following data: Month OOO OWN- Overhead Costs $142,790 151,780 192,780 141,080 204,290 180,670 159,550 183,960 194,310 150,270 154,200 184,900 183,200 Number of Deliveries 11,830 12,580 16,060 11,650 13,180 15,130 12,910 15,460 15,850 12,370 13,030 15,700 14,980 12 13 The company controller is somewhat surprised that the cost estimates are so different. You have been asked to recheck your work and see if you can figure out the difference between your results and the controller's results. Required: a. Analyze the data and your results in the graph below. 1. On the graph below, use the point taal to plat the point corresponding to the number of deliveries to the relating overhead costs (Month 1). 2. Repeat the process for the remainder of the sample (Month 2 Month 3....). 3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y Interpretation of Regression Results: Simple Regression Wonth 1 200001 Wurth MO Worth tas.co Worth Wanths Worth con tado 1300 109 str 10 10 Worth 7 Deliveries reset Perform a regression analysis in Excel to determine the regression coeficients for the cata. (Round your final answers to 2 decimal places.) Coefficients Irlercept Number of divers b. Change the question to 'Determine the amount of deliveries needed to earn operating profits of $10,800. (Round your intermediate calculations 2 decimal places. Roundup "unit" answer to the nearest whole number.) The no. of units company needs approwimately to earn uperating profits of S10.800 Problem 5-57 Interpretation of Regression Results: Simple Regression (LO 5-5) Your company provides a variety of delivery services. Management wants to know the volume of a particular delivery that would generate $10,800 per month in operating profits before taxes. The company charges $20 per delivery. The controller's office has estimated overhead costs at $9,000 per month for fixed costs and $12 per delivery for variable costs. You believe that the company should use regression analysis. Your analysis shows the results to be: Monthly overhead = $22,406 + $10.69 per delivery Your estimate was based on the following data: Month OOO OWN- Overhead Costs $142,790 151,780 192,780 141,080 204,290 180,670 159,550 183,960 194,310 150,270 154,200 184,900 183,200 Number of Deliveries 11,830 12,580 16,060 11,650 13,180 15,130 12,910 15,460 15,850 12,370 13,030 15,700 14,980 12 13 The company controller is somewhat surprised that the cost estimates are so different. You have been asked to recheck your work and see if you can figure out the difference between your results and the controller's results. Required: a. Analyze the data and your results in the graph below. 1. On the graph below, use the point taal to plat the point corresponding to the number of deliveries to the relating overhead costs (Month 1). 2. Repeat the process for the remainder of the sample (Month 2 Month 3....). 3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y Interpretation of Regression Results: Simple Regression Wonth 1 200001 Wurth MO Worth tas.co Worth Wanths Worth con tado 1300 109 str 10 10 Worth 7 Deliveries reset Perform a regression analysis in Excel to determine the regression coeficients for the cata. (Round your final answers to 2 decimal places.) Coefficients Irlercept Number of divers b. Change the question to 'Determine the amount of deliveries needed to earn operating profits of $10,800. (Round your intermediate calculations 2 decimal places. Roundup "unit" answer to the nearest whole number.) The no. of units company needs approwimately to earn uperating profits of S10.800
