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?

---

Definitions:

Net Cash Inflows

The total amount of money received from operations, investments, and financing activities, minus the amount of money spent.

Operating Income

The profit realized from a company's everyday core business operations, excluding deductions of interest and taxes.

Cash Payback Period

The duration needed for an investment to generate cash flows sufficient to recover the initial cost of the investment.

Net Cash Inflow

Net cash inflow refers to the difference between the cash inflows and outflows within a given period, indicating the net change in cash and cash equivalents resulting from a company's activities.