Question

Furlan Printing Corp, a book printer, has provided the following data: Titles Press Setup Cost Printed 3,269 3,302 3,787 3,095 3,706 3,650 3,652 3,300 28 Mlay 29 June $ $ 41 July August September October 23 12 39 $ $ $ 37 38 November 34 December Management believes that the press setup cost is a mixed cost that depends on the number of titles printed. (A specific book that is to be printed is called a "title" Typically, thousands of copies will be printed of each title. Specific steps must be taken to setup the presses for printing each title-for example, changing the printing plates. The costs of these steps are the press setup costs.) Required: Estimate the variable cost per title printed and the fixed cost per month using the least-squares regression method. (Round the "Variable cost" to 2 decimal places and the "Fixed cost" to the nearest dollar amount.) Variable cost per title printed Fixed cost per month

Answer 1

Answer:

variable cost	38.73	per title printed
fixed cost	2,168	per month

Tiles Printed (x) Press Setup " Cost (4) Ex² Exy 3269 784 841 1681 91532 95758 3302 3787 155267 3695 529 71185 3706 1521 144534 3650 1369 135050 3652 1444 138776 3300 1156 112200 27761 9325 94402 Variable Cost Per unit: b= n(Exy)-(Ex) (Ey) O n({x-)-(Ex) fixed Cost = G = {y-b(Ex) b= $(944302)-(269) (29761) 819375) - (269) b= 7,554,416 - 7,467,709 74600 - 72,361 b = 86,707 2,239 [6= 38.73 lunit]

a= 27,761 - 38.73 (269) = 27.761 - 10,418:37 = 17,342,63 (4 = 2,168 1 month Now Regression limes Y= a + bx Y=2168+38-73X where, Y = total cost G= fixed cost b = variable Cast/ unit x = No d Units