Instruction 14-11
the President of a Chain of Department Stores

question 143

Short Answer

Instruction 14-11
The president of a chain of department stores believes that her stores' total sales have been showing a linear trend since 1980.She uses Microsoft Excel to obtain the partial output below.The dependent variable is sales (in millions of dollars),while the independent variable is coded years,where 1990 is coded as 0,1991 is coded as 1,etc.
SUMMARY OUTPUT
Regression Statistics
$\begin{array} { l r } \text { Multiple R } & 0.604 \\ \text { R Square } & 0.365 \\ \text { Adjusted R Square } & 0.316 \\ \text { Standard Error } & 4.800 \\ \text { Observations } & 17 \end{array}$
$\quad\quad\quad\quad\quad\quad\quad$ Coefficients
$\quad$ Intercept $\quad\quad\quad\quad 31.2$
$\begin{array} { l l } \text { Coded Year } \quad & 0.78 \end{array}$
-Referring to Instruction 14-11,the forecast for sales (in millions of dollars)in 2010 is ________.

Analyze the effects of different production strategies on a firm's cost structure, specifically the impact of economies of scope.

Calculate the degree of economies of scope from given cost functions and interpret the results.

Distinguish between the effects of learning curves and economies of scale on production costs.

Apply knowledge of cost functions and production outputs to solve problems related to joint production costs.

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Definitions:

Liability

The state of being legally responsible for something, especially in terms of debts or legal obligations.

Duty of Accounting

An agent’s obligation to keep an accurate account of the transactions of money and property made on behalf of the principal.

Agent

A representative authorized to act on behalf of another person or organization, especially in business or legal matters.

Principal

The original amount of money invested or loaned, upon which interest is calculated, or the main party involved in a transaction.