This is an in depth accounting problem set. Please read the requirements and answer all questions. I have attached two documents. One is the problem sets and the other is the requirements.

2/21/2017 Requirements Requirements 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain. 2. Graph the hospital's overhead costs against nursing hours. 3. Graph the hospital's overhead costs against the number of patient days. 4. Do the data appear to be sound or do you see any potential data problems? Explain. 5. Use the highlow method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 23,500 nursing hours are predicted for the month. 6. Ms. Johnson runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is shown here (Click the icon to view the regression analysis.) If 23,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? 7. Ms. Johnson then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: (Click the icon to view the regression analysis.) If 3,800 patient days are predicted for the month, what is the total predicted hospital overhead? 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkId=407652723&questionId=1&ushed=false&cId=4297043&back=DoAssignments.aspx%3fview... 1/1 2/21/2017 Module 7 Homework-Natalie Wagner Instructor: Suzanne Seymoure Course: Financial & Managerial Accting MBA560MBOL1 Student: Natalie Wagner Date: 2/21/17 1. Billie Johnson is the Chief Operating Officer at Union Hospital in Newark , New Jersey. She is analyzing the hospital's overhead costs but is not sure whether nursing hours or the number of patient days would be the best cost driver to use for predicting the hospital's overhead. Assignment: Module 7 Homework She has gathered the following information for the last six months of the most recent year: 1 (Click the icon to view the information.) Read the requirements.2 Requirement 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain. The hospital's overhead costs appear to be a (1) remain constant in total each month. If it were a (3) cost. If it were a (2) cost, it would cost, it would remain constant on a per unit (of activity) basis. Both of the hospital's overhead cost per nursing hour and overhead cost per patient day (4) volume. with ( After you hit continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 2. Graph the hospital's overhead costs against nursing hours. Plot the points5 on the graph. (Enlarge the graph to medium size and use the point tool button displayed below to draw the graph.) Hospital Overhead Costs Relationship of Hospital Overhead Costs to Nursing Hours $585,000 $390,000 16,000 34,000 Nursing Hours ( After you hit continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 3. Graph the hospital's overhead costs against the number of patient days. Plot the points6 on the graph. (Enlarge the graph to medium size and use the point tool button displayed below to draw the graph.) https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 1/8 2/21/2017 Module 7 Homework-Natalie Wagner Hospital Overhead Costs Relationship of Hospital Overhead Costs to Number of Patient Days $585,000 $390,000 3,100 5,900 Number of Patient Days Requirement 4. Do the data appear to be sound or do you see any potential data problems? Explain. There (5) outlier in the graph depicting overhead costs against nursing hours. In the graph of overhead costs against the number of patient days, there (6) outlier. (7) data point appears out of line with the other data points. If any of the data points are out of line, management (8) before continuing with the analysis. check into this data Requirement 5. Use the highlow method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 23,500 nursing hours are predicted for the month. Use the highlow method to determine the hospital's cost equation using nursing hours as the cost driver. (Round the variable cost to the nearest cent.) y = $ x + $ Predict total overhead costs if 23,500 nursing hours are predicted for the month. The total predicted overhead costs for the month is $ . Requirement 6. Ms. Johnson runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is shown here 7 (Click the icon to view the regression analysis.) If 23,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? (Round your answer to the nearest cent.) The total predicted hospital overhead, when 23,500 nursing hours are predicted for the month, is $ . Requirement 7. Ms. Johnson then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: 8 (Click the icon to view the regression analysis.) If 3,800 patient days are predicted for the month, what is the total predicted hospital overhead? (Round your answer to the nearest cent.) The total predicted hospital overhead, when 3,800 patient days are predicted for the month, is $ . Requirement 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. We have the most confidence in the cost equation using (9) (10) . The Rsquare value for that equation was the . 1: Data Table https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 2/8 2/21/2017 Module 7 Homework-Natalie Wagner Hospital Nursing Month Overhead Costs Hours July Number of Overhead Cost Overhead Cost Patient Days per Nursing Hour per Patient Day ....... $ 479,000 23,000 3,640 $ 20.83 $ 131.59 August . . . . . . $ 528,000 25,500 4,300 $ 20.71 $ 122.79 September . . $ 416,000 20,500 4,260 $ 20.29 $ 97.65 October . . . . $ 453,000 22,000 3,490 $ 20.59 $ 129.80 November . . . $ 559,000 30,500 5,730 $ 18.33 $ 97.56 December . . . $ 435,000 21,000 3,280 $ 20.71 $ 132.62 2: Requirements Requirements 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain. 2. Graph the hospital's overhead costs against nursing hours. 3. Graph the hospital's overhead costs against the number of patient days. 4. Do the data appear to be sound or do you see any potential data problems? Explain. 5. Use the highlow method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 23,500 nursing hours are predicted for the month. 6. Ms. Johnson runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is shown here 3 (Click the icon to view the regression analysis.) If 23,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? 7. Ms. Johnson then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: 4 (Click the icon to view the regression analysis.) If 3,800 patient days are predicted for the month, what is the total predicted hospital overhead? 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. 3: Regression analysis using nursing hours Regression Statistics Multiple R 0.958335 R Square 0.918405 Adjusted R Square 0.898007 Standard Error 17,712.08289 Observations Anova 6 df SS MS F Signicance F Regression 1 14,124,461,812 14,124,461,812 45.022814 0.002568 Residual 4 1,254,871,522 313,717,880 Total 5 15,379,333,334 https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 3/8 2/21/2017 Module 7 Homework-Natalie Wagner Coecients Intercept Standard Error t Stat P-value Lower 95% Upper 95% 141,867.97 50,663.259 2.8 0.049 1,204.213 282,531.726 14.17 2.111 6.71 0.003 8.305 20.029 X Variable 1 4: Regression analysis using number of patient days Regression Statistics Multiple R 0.736429 R Square 0.542327 Adjusted R Square 0.427909 Standard Error 41,948.4953 Observations Anova 6 df SS MS F Signicance F Regression 1 8,340,628,301 8,340,628,301 4.739865 0.09505 Residual 4 7,038,705,032 1,759,676,258 Total 5 15,379,333,333 P-value Lower 95% Coecients Intercept Standard Error t Stat Upper 95% 289,807.47 88,271.2 3.283 0.03 44,727.331 534,887.615 45.8 21.035 2.177 0.095 -12.607 104.198 X Variable 1 5: Denition When plotting the points, be sure to doublecheck that the points are correct after they are drawn. If you need to adjust the points, click once on the point then use your arrow keys to move the point to the correct (x,y) coordinates. 6: Denition When plotting the points, be sure to doublecheck that the points are correct after they are drawn. If you need to adjust the points, click once on the point then use your arrow keys to move the point to the correct (x,y) coordinates. 7: Regression analysis using nursing hours Regression Statistics Multiple R 0.958335 R Square 0.918405 Adjusted R Square 0.898007 Standard Error 17,712.08289 Observations Anova 6 df SS MS F Signicance F Regression 1 14,124,461,812 14,124,461,812 45.022814 0.002568 Residual 4 1,254,871,522 313,717,880 Total 5 15,379,333,334 https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 4/8 2/21/2017 Module 7 Homework-Natalie Wagner Coecients Intercept Standard Error t Stat P-value Lower 95% Upper 95% 141,867.97 50,663.259 2.8 0.049 1,204.213 282,531.726 14.17 2.111 6.71 0.003 8.305 20.029 X Variable 1 8: Regression analysis using number of patient days Regression Statistics Multiple R 0.736429 R Square 0.542327 Adjusted R Square 0.427909 Standard Error 41,948.4953 Observations Anova 6 df SS MS F Signicance F Regression 1 8,340,628,301 8,340,628,301 4.739865 0.09505 Residual 4 7,038,705,032 1,759,676,258 Total 5 15,379,333,333 P-value Lower 95% Coecients Intercept (5) fixed Upper 95% 88,271.2 3.283 0.03 44,727.331 534,887.615 45.8 21.035 2.177 0.095 -12.607 104.198 (4) are fixed (2) (3) fixed fixed mixed mixed mixed variable variable variable (6) does appear to be an does not appear to be any (7) t Stat 289,807.47 X Variable 1 (1) Standard Error No The October The July The November The August The December vary does appear to be an does not appear to be any (8) should should not (9) number of patient days nursing hours The September (10) highest lowest https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 5/8 2/21/2017 Module 7 Homework-Natalie Wagner 2. Carmichael Industries is in the process of analyzing its manufacturing overhead costs. Carmichael Industries is not sure if the number of units produced or the number of direct labor (DL) hours is the best cost driver to use for predicting manufacturing overhead (MOH) costs. The following information is available: 9 (Click the icon to view the information.) Read the requirements.10 Requirement 1. Determine if the manufacturing overhead costs are fixed, variable, or mixed? Carmichael 's manufacturing overhead appears to be a (1) cost. If it were a (2) would remain constant in total each month. If it were a (3) cost, it would remain constant on a per unit (of activity) basis. Both Carmichael 's MOH per DL hour and MOH per unit (4) cost, it with volume. ( After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 2. Next plot the points11 on the graph for the manufacturing overhead costs against DL hours. (Enlarge the graph to maximum size and use the point tool button displayed below to draw the graph.) Carmichael's Overhead Cost $630,000 $390,000 17,000 35,000 Processing Hours ( After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 3. Now plot the points12 on the graph for the manufacturing overhead costs against units produced. (Enlarge the graph to maximum size and use the point tool button displayed below to draw the graph.) Carmichael's Overhead Cost $630,000 $390,000 3,100 5,900 Cases Requirement 4. Does the data appear to be sound or do you see any potential data problems? https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 6/8 2/21/2017 Module 7 Homework-Natalie Wagner There (5) outlier in the graph depicting MOH costs vs. DL hours. In the graph of MOH costs vs. units, there (6) outlier. (7) data point appears out of line with the other data points. If any of the data points are out of line, management (8) check into this data before continuing with the analysis. Requirement 5. Next use the highlow method to determine the manufacturing overhead cost equation using processing hours as the cost driver. (Round the variable cost to the nearest cent.) y = $ x + $ Requirement 6. Finally estimate manufacturing overhead costs if Carmichael incurs 25,500 DL hours in January. January's estimated manufacturing overhead costs are $ . 9: Data Table MOH MOH Manufacturing Direct Cost per Cost per Overhead Labor Units DL Unit Costs Hours Produced Hour Produced Month July . . . . . . . . . $ 520,000 23,600 3,650 $ 22.03 $ 142.47 August . . . . . . . . $ 573,000 27,000 4,360 $ 21.22 $ 131.42 September . . . . $ 465,000 21,000 4,230 $ 22.14 $ 109.93 October . . . . . . $ 505,000 22,100 3,450 $ 22.85 $ 146.38 November . . . . $ 627,000 33,000 5,790 $ 19.00 $ 108.29 December . . . . . $ 485,000 21,500 3,290 $ 22.56 $ 147.42 10: Requirements 1. Are manufacturing overhead costs fixed, variable, or mixed? Explain. 2. Graph Carmichael Industries' manufacturing overhead costs against DL hours. 3. Graph Carmichael Industries' manufacturing overhead costs against units produced. 4. Do the data appear to be sound, or do you see any potential data problems? Explain. 5. Use the highlow method to determine Carmichael Industries' manufacturing overhead cost equation using DL hours as the cost driver. Assume that management believes that all data is accurate and wants to include all of it in the analysis. 6. Estimate manufacturing overhead costs if Carmichael Industries incurs 25,500 DL hours in January. 11: Denition When plotting the points, be sure to doublecheck that the points are correct after they are drawn. If you need to adjust the points, click once on the point then use your arrow keys to move the point to the correct (x,y) coordinates. 12: Denition When plotting the points, be sure to doublecheck that the points are correct after they are drawn. If you need to adjust the points, click once on the point then use your arrow keys to move the point to the correct (x,y) coordinates. https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 7/8 2/21/2017 (1) (5) Module 7 Homework-Natalie Wagner fixed (2) (3) fixed mixed mixed variable variable variable (6) does appear to be an does not appear to be any (7) fixed mixed No The October The July The November The August The December (4) are fixed vary does appear to be an does not appear to be any (8) should should not The September https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 8/8