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XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH),
XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (Mhr), and the third is based on quantity produced (Q). The results were: [Y=$150,000+ $10xDLH; R-square = 0.111: [Y= $190,000+ $5xMhr; R-square = 0.95): [Y=200,000+2Q; R-square=0.52). Based on this information, which cost driver do you recommend? Select one: a. Direct labor hours (DLH) b. Quantity produced (Q) c. All cost drivers are the same d. None of them e. Machine hours (hr) On the CVP graph, the next unit sold will increase total cost by an amount equal to the Select one: a. Variable costs per unit b. Selling price per unit c. Contribution margin ratio d. Difference between contribution margin and fixed costs e. Selling price per unit minus the variable costs per unit
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