Question

Problem 1-30-An important application of regression analysis in accounting is the estimation of costs. By collecting data on volume of production and costs, an accountant can estimate the cost associated with a particular manufacturing volume that can be recovered by the company Additionally, the accountant would specifically find outsunk costs from the manufacturing process cost that has already been incurred and cannot be recovered). Consider the example of paper bags manufacturing Collected data in table bellow show cost of production (thousand $) and volume (units) of bags. Volume Produced CostofProduction 370 500 520 380 Mean 452

Answer 1

370 490 (x-x}" 6724.0000 1444.0000 2304.0000 4624.0000 5184.0000 20280.0000 SSX BOOOM 500 520 380 2260 452.000 (x-7)(y-7) 86.9200 -212800 40.3200 77.5200 25.9200 209.4000 SXY 5.7 Total Mean 4.2 22.8 4.56 sample size: here 4.5600 452.0000 (X-X)= (X-X)Y:-7)= Sxy/Sxx- 20280.000 209.400 0.010 slope-

from above:

line equation is : yhat =-0.08+0.01x