Question
The managing director of a consulting group has the following monthly data on total overhead costs and professional labor hours to bill to clients overhead
The managing director of a consulting group has the following monthly data on total overhead costs and professional labor hours to bill to clients
overhead cost | Billable hours |
$355,000 | 3,000 |
$400,000 | 4,000 |
$425,000 | 5,000 |
$477,000 | 6,000 |
$560,000 | 7,000 |
$580,000 | 8,000 |
A) Develop a simple linear regression model between billable hours and overhead costs.
B)Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm?
C) If a special job was available requiring 4,500 billable hours that would contribute a margin of $240,000 before overhead, would the job be attractive?
PLEASE EXPLAIN HOW TO DO IN IN EXCEL INCLUDING FORMULAS
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started