Sisler Company Would Like to Estimate Its Total Manufacturing Costs

question 108

Essay

Sisler Company would like to estimate its total manufacturing costs using regression analysis but
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:
1. What is the cost equation if machine hours is used as the volume (cost driver)?
2. Predict total manufacturing costs using machine hours as the volume (cost driver) if Sisler Company uses 18,000 hours.
3. What is the cost equation if units produced is used as the volume (cost driver)?
4. Predict total manufacturing costs using units produced as the volume (cost driver) if Sisler Company produces 65,000 units.
5. Which volume (cost driver) is a better predictor of total manufacturing costs? Why?

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Definitions:

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The act of inflicting severe pain or suffering on a person, often in a public setting, as a form of punishment or to extract information or confessions.

Black Man

A term used to describe a male of African descent or African American heritage, often contextualized within discussions of race and social issues in society.

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The 28th President of the United States (1913–1921), known for his role in leading the nation through World War I and advocating for the League of Nations.