2.Grawburg Inc. maintains a call center to take orders, answer questions, and handle complaints. The costs of the call c...

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2.Grawburg Inc. maintains a call center to take orders, answer questions, and handle complaints. The costs of the call c...

2.Grawburg Inc. maintains a call center to take orders, answer questions, and handle complaints. The costs of the call center for a number of recent months are listed below:

	Calls Taken	Call Center Cost
April	8,450	$	91,609
May	8,419	$	91,440
June	8,460	$	91,668
July	8,459	$	91,651
August	8,423	$	91,458
September	8,434	$	91,496
October	8,476	$	91,722
November	8,464	$	91,678

Management believes that the cost of the call center is a mixed cost that depends on the number of calls taken.

Required:

Use Excel to estimate the variable cost per call and 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.) Please attach your Excel spreadsheet to support your answer.

business accounting

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Answer 1

Answer #1

	Calls Taken	Call Center Cost
April	8450	$ 91,609
May	8419	$ 91,440
June	8460	$ 91,668
July	8459	$ 91,651
August	8423	$ 91,458
September	8434	$ 91,496
October	8476	$ 91,722
November	8464	$ 91,678

steps:

1	click on "Data"
2	Select "Data Analysis"
3	Select "Regression", click "ok"
4	Under “Input Y Range,” enter the range for the total call center costs data, including the heading
5	Under “Input X Range,” enter the total calls taken data, including the heading
6	Click on the box for “Labels
7	Select an output range on your spreadsheet
8	Click on “OK

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.99422361
R Square	0.98848059
Adjusted R Square	0.98656069
Standard Error	12.7063476
Observations	8

ANOVA
	df	SS	MS	F	Significance F
Regression	1	83124.79238	83124.79	514.8599	4.8E-07
Residual	6	968.7076198	161.4513
Total	7	84093.5

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	46903.0207	1969.427529	23.81556	3.6E-07	42084.01	51722.04	42084.01	51722.04
Calls Taken	5.28960323	0.233119468	22.69053	4.8E-07	4.71918	5.860026	4.71918	5.860026


Variable Cost per unit = the value shown in the coefficient column and calls taken row.	$ 5.29
Fixed Cost = the value shown in the coefficient column and intercept row.	$46,903.02

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Answer 2

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