Matt Helm Company Used Least- Squares Regression Analysis to Obtain

question 53

Essay

Matt Helm Company used least- squares regression analysis to obtain the following output: Payroll Dep artment Cost
Explained by Number of
Employees
$\begin{array}{ll}\text { Constant } & \$ 9,800 \\\text { Standard error of Y estimate } & \$ 630 \\\text { R - squared } & 0.9424 \\\text { No. of observations } & 20 \\\text { Degrees of freedom } & 18 \\\text { X coefficient(s) } & 3902 \\\text { Standard error of coefficient(s) } & 0.0966\end{array}$ a. What is the total fixed cost?
b. What is the variable cost per employee?
c. Prepare the linear cost function.
d. What is the coefficient of determination? Comment on the goodness of fit.

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Definitions:

Salaries

Compensation given to employees for their labor or services, typically paid on a monthly or biweekly basis.

Five-day Week

A common work schedule that consists of five working days, usually Monday through Friday, followed by a two-day weekend.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the decrease in the value of the asset over time.

Adjusting Entry

An accounting entry made at the end of a period to assign income and expenses to the period in which they actually occurred.