Scranton Printer Company Would Like to Estimate Its Total Manufacturing

question 78

Essay

Scranton Printer Company would like to estimate its total manufacturing costs using regression analysis but is unsure whether machine hours or units produced would be a better predictor of total manufacturing costs.
Output from regression analysis using machine hours as the volume (cost driver)follows. Note: the results are excerpts so not all of the regression analysis results are presented.
Output from a regression analysis using units produced as the volume (cost driver)follows. Again, the results are excerpts so not all of the regression analysis results are presented.
Required:
a. What is the cost equation if machine hours is used as the volume (cost driver)?
b. Predict total manufacturing costs using machine hours as the volume (cost driver)if Scranton Paper Company uses 18,000 hours.
c. What is the cost equation if units produced is used as the volume (cost driver)?
d. Predict total manufacturing costs using units produced as the volume (cost driver)if Scranton Paper Company produces 65,000 units.
e. Which volume (cost driver)is a better predictor of total manufacturing costs? Why?

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Definitions:

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The process of becoming older in a deleterious sense, characterized by the gradual decline in physical and functional capabilities over time.

Fast Aging

Accelerated biological aging, which involves the rapid decline of bodily functions compared to the average aging rate.

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A phase of life between adolescence and full-fledged adulthood that spans approximately from the ages of 18 to 25, marked by exploration, instability, and self-focus.

Developmental Stage

A phase in the growth or development process characterized by specific psychological or physical milestones.