41) Gourmet College has recently opened a restaurant as part of its hospitality major. The manager gathered the following data from the first five weeks of operations. Knowing you are currently taking a managerial accounting course he has asked that you analyze the data
Week
|
Number of customers per week
|
Weekly total restaurant costs incurred
|
1
|
1,200
|
$25,200
|
2
|
1,600
|
26,890
|
3
|
1,750
|
28,840
|
4
|
1,633
|
27,150
|
5
|
1,900
|
38,150
|
6
|
1,790
|
29,600
|
Using the high-low method, what will the total monthly manufacturing costs be if the company produces 1,850 units?
A) $2,625
B) $5,555
C) $4,525
D) $37225
1) The intercept-coefficient in regression analysis yields the fixed cost portion of the total costs.
2) The X Variable 1 Coefficient in regression analysis yields the variable cost per unit of activity.
3) A high R-square statistic of +1 indicates a perfect level of correlation between costs and the cost driver.
4) The cost equation determined using the high-low method should be the same as the cost equation determined using regression analysis.
5) The line determined by regression analysis is sometimes referred to as the “line of best fit”.
6) The “intercept coefficient” determined by regression analysis is sometimes referred to as the “goodness-of-fit” statistic.
7) The cost equation determined by regression analysis is usually less accurate than the line determined by the high-low method.
8) In a regression output, the “intercept coefficient” represents the fixed cost component of a mixed cost equation.
9) In a regression output, the “X variable 1 coefficient” represents the fixed cost component of a mixed cost equation.