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Thane Company Is Interested in Establishing the Relationship Between Electricity

question 1

Multiple Choice

Thane Company is interested in establishing the relationship between electricity costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow: $\begin{array} { | l | r | r | } \hline \text { Month } & \text { Machine Hours } & \text { Electricity Costs } \\\hline \text { January } & 2,500 & 18,400 \\\hline \text { February } & 2,900 & 21,000 \\\hline \text { March } & 1,900 & 13,500 \\\hline \text { April } & 3,100 & 23,000 \\\hline \text { May } & 3,800 & 28,250 \\\hline \text { June } & 3,300 & 22,000 \\\hline \text { Juby } & 4,100 & 24,750 \\\hline \text { August } & 3,500 & 22,750 \\\hline \text { September } & 2,000 & 15,500 \\\hline \text { October } & 3,700 & 26,000 \\\hline \text { November } & 4,700 & 31,000 \\\hline \text { December } & 4,200 & 27,750 \\\hline\end{array}$
$Thane Company is interested in establishing the relationship between electricity costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow: \begin{array} { | l | r | r | } \hline \text { Month } & \text { Machine Hours } & \text { Electricity Costs } \\ \hline \text { January } & 2,500 & 18,400 \\ \hline \text { February } & 2,900 & 21,000 \\ \hline \text { March } & 1,900 & 13,500 \\ \hline \text { April } & 3,100 & 23,000 \\ \hline \text { May } & 3,800 & 28,250 \\ \hline \text { June } & 3,300 & 22,000 \\ \hline \text { Juby } & 4,100 & 24,750 \\ \hline \text { August } & 3,500 & 22,750 \\ \hline \text { September } & 2,000 & 15,500 \\ \hline \text { October } & 3,700 & 26,000 \\ \hline \text { November } & 4,700 & 31,000 \\ \hline \text { December } & 4,200 & 27,750 \\ \hline \end{array} If the controller uses regression analysis to estimate costs,the cost equation for electricity cost is: A) Cost = $1,425.18 + $12.00 × Machine-hours. B) Cost = $3,726.88 + $1,682.82 × Machine-hours. C) Cost = $1,682.82 + $0.49 × Machine-hours. D) Cost = $3,726.88 + $5.77 × Machine-hours.$
If the controller uses regression analysis to estimate costs,the cost equation for electricity cost is:

Determine the overall net operating income at the break-even point.

Understand the differences between variable and fixed costs in cost accounting.

Develop skills in contributing format income statement preparation.

Apply cost accounting concepts to make informed financial decisions.

Definitions:

Weight Factors

Variables or coefficients assigned in a calculation or analysis to reflect the importance or influence of different elements.

Physical Measures

Quantitative indicators used to assess the physical aspects of a business, such as volume of production or quantity of materials used.

Market Value

The present cost for purchasing or selling a product or service in a market.

Split-Off Point

The Split-Off Point is a stage in a production process where multiple products are generated from common inputs, each taking a different processing path thereafter.