The Cost Accountant for Vancouver Company Used an Excel Spreadsheet $$\begin{array} { l l } \text { Intercept } & 3,500 \\\mathrm { X } \text { Variable } & 3.75\end{array}$$

question 130

Essay

The cost accountant for Vancouver Company used an Excel spreadsheet program to run ordinary least squares on a set of cost data for its utility cost.Vancouver's cost driver for utility cost is machine hours.The following results were produced.
Required:
$$\begin{array} { l l } \text { Intercept } & 3,500 \\\mathrm { X } \text { Variable } & 3.75\end{array}$$ A. Construct the cost formula for Vancouver's utility cost using the results from the method of least squares.
B. Using the formula computed in (A), what is the estimated cost of utilities for May assuming that Vancouver will incur 150,000 machine hours?

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