You Are Given the Following Costs to Build a Square

question 562

Essay

You are given the following costs to build a square deck for your house: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | c | c | } \hline \text { Width (ft) } & 4 & 5 & 6 & 7 & 8 & 9 & 10 & 11 & 12 & 13 & 14 & 15 \\\hline \text { Cost (\$) } & 150 & 255 & 350 & 500 & 650 & 800 & 1000 & 1200 & 1450 & 1700 & 1950 & 2250 \\\hline\end{array}$$
a. Use re-expressed data to create a model that predicts the cost of the deck based on the
width.
b. Why do you think that your model is appropriate?
c. Find the predicted cost of a square deck that is 10.5 feet wide.
d. Is it reasonable to use this model to predict the cost of a square deck that is 20 feet wide?
Explain.

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Definitions:

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are therefore written off as a loss.

Direct Write-off Method

A method used in accounting to write off bad debts when they are determined to be uncollectible, impacting accounts receivable and expense accounts directly.

Recovery of Bad Debt

The process of collecting funds previously written off as uncollectible, generally resulting in an income statement gain the period it's recovered.

Percent of Sales Method

A financial forecasting approach that estimates future financial statements' items as a percentage of projected sales.