ANSWER
Part 1
Cost function: total cost = €6771 + 28% of total revenue
Raw materials are variable = 4029/16116 = 25%
Labor and rent are fixed
Miscellaneous using regression analysis comes to 289 fixed and 3% variable
SUMMARY OUTPUT |
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Regression Statistics |
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Multiple R |
0.873015 |
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R Square |
0.762156 |
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Adjusted R Square |
0.643234 |
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Standard Error |
69.9928 |
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Observations |
4 |
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ANOVA |
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df |
SS |
MS |
F |
Significance F |
||||
Regression |
1 |
31397.01 |
31397.01 |
6.408871 |
0.126985 |
|||
Residual |
2 |
9797.985 |
4898.993 |
|||||
Total |
3 |
41,195 |
||||||
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Lower 95.0% |
Upper 95.0% |
|
Intercept |
288.5315 |
162.9787 |
1.770363 |
0.218684 |
-412.709 |
989.7724 |
-412.709 |
989.7724 |
X Variable 1 |
0.033137 |
0.013089 |
2.531575 |
0.126985 |
-0.02318 |
0.089456 |
-0.02318 |
0.089456 |
Part 2
Revenue = fixed expense + profit / contribution margin ratio = (6771+10000)/(1-0.28) = $23,293
Part 3
Degree of operating leverage = contribution margin / profit = (16116*(1-0.28))/4812 = 2.41
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