Hankuk Electronics started production on a sophisticated new smartphone running the Android operating system in January 2017. Given the razor-thin margins in the consumer electronics indus- try,...


Hankuk Electronics started production on a sophisticated new smartphone running<br>the Android operating system in January 2017. Given the razor-thin margins in the consumer electronics indus-<br>try, Hankuk's success depends heavily on being able to produce the phone as economically as possible.<br>At the end of the first year of production, Hankuk's controller, Inbee Kim, gathered data on its monthly<br>levels of output, as well as monthly consumption of direct labor-hours (DLH). Inbee views labor-hours as<br>the key driver of Hankuk's direct and overhead costs. The information collected by Inbee is provided below:<br>Home<br>Insert<br>Page Layout<br>Formulas<br>Month Output (Units) Direct Labor-Hours<br>2 January<br>3 February<br>4 March<br>684<br>1,400<br>492<br>820<br>660<br>875<br>5 April<br>6 May<br>7 June<br>8 July<br>9 August<br>10 September<br>11 October<br>12 November<br>13 December<br>504<br>670<br>612<br>760<br>636<br>765<br>648<br>735<br>600<br>660<br>648<br>695<br>696<br>710<br>672<br>690<br>675<br>700<br>1. Inbee is keen to examine the relationship between direct labor consumption and output levels. She<br>decides to estimate this relationship using a simple linear regression based on the monthly data. Verify<br>that the following is the result obtained by Inbee:<br>Regression 1: Direct labor-hours = a + (b x Output units)<br>Variable<br>Coefficient<br>Standard Error<br>Value<br>Constant<br>345.24<br>589.07<br>0.59<br>Independent variable: Output units<br>0.71<br>0.93<br>0.76<br>? = 0.054; Durbin-Watson statistic<br>= 0 50<br>

Extracted text: Hankuk Electronics started production on a sophisticated new smartphone running the Android operating system in January 2017. Given the razor-thin margins in the consumer electronics indus- try, Hankuk's success depends heavily on being able to produce the phone as economically as possible. At the end of the first year of production, Hankuk's controller, Inbee Kim, gathered data on its monthly levels of output, as well as monthly consumption of direct labor-hours (DLH). Inbee views labor-hours as the key driver of Hankuk's direct and overhead costs. The information collected by Inbee is provided below: Home Insert Page Layout Formulas Month Output (Units) Direct Labor-Hours 2 January 3 February 4 March 684 1,400 492 820 660 875 5 April 6 May 7 June 8 July 9 August 10 September 11 October 12 November 13 December 504 670 612 760 636 765 648 735 600 660 648 695 696 710 672 690 675 700 1. Inbee is keen to examine the relationship between direct labor consumption and output levels. She decides to estimate this relationship using a simple linear regression based on the monthly data. Verify that the following is the result obtained by Inbee: Regression 1: Direct labor-hours = a + (b x Output units) Variable Coefficient Standard Error Value Constant 345.24 589.07 0.59 Independent variable: Output units 0.71 0.93 0.76 ? = 0.054; Durbin-Watson statistic = 0 50

Jun 02, 2022
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