Midose's Stables Used Two Different Independent Variables (Trainer Hours and Number

question 95

Multiple Choice

Midose's Stables used two different independent variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses.The most recent results of the two regressions are as follows: Trainer's hours:
$\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\\\text { Constant } & \$ 1,004.65 & \$ 217.93 & 4.61 \\\text { Independent Variable } & \$ 22.99 & \$ 3.23 & 7.11\\r62=0.56\end{array}$ Number of horses:
$\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\\\text { Constant } & \$ 5,240.95 & \$ 1,180.40 & 4.44 \\\text { Independent Variable } & \$ 951.48 & \$ 271.85 & 3.50\\r62=0.63\end{array}$ What is the estimated total cost for the coming year if 15,000 trainer hours are incurred and the stable has 350 horses to be trained,based upon the best cost driver?

• A) $96,327.90
• B) $338,258.95
• C) $345,854.65
• D) $14,277,440.95

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Definitions:

Profit and Loss

A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Trial Balance

A financial report that lists all the balances in each ledger account at a point in time, used to ensure debits equal credits.

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.