Dillenbeck Printing Corp Management Believes That the Press Setup Cost Is a Mixed

question 20

Essay

Dillenbeck Printing Corp. ,a book printer,has provided the following data: $\begin{array}{lcc}&\text { Titles Printed } & \text { Press Setup Cost } \\\text {February. }&33 & \$ 3,170 \\\text {March. }&34 & \$ 3,203 \\\text { April}&46 & \$ 3,688 \\\text {May. }&28 & \$ 2,996 \\\text {June }&44 & \$ 3,607 \\\text {July }&42 & \$ 3,551 \\\text {August }&43 & \$ 3,586 \\\text {September }&39 & \$ 3,413\end{array}$ Management believes that the press setup cost is a mixed cost that depends on the number of titles printed.(A specific book that is to be printed is called a "title".Typically,thousands of copies will be printed of each title.Specific steps must be taken to setup the presses for printing each title-for example,changing the printing plates.The costs of these steps are the press setup costs. )
Required:
Estimate the variable cost per title printed and the fixed cost per month using the least-squares regression method.

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Definitions:

End-Of-Period Adjusting Entries

Entries recorded in journals at the close of an accounting cycle to refresh the balances of accounts prior to the compilation of financial statements.

Supplies Account

An account used in accounting to track the amount spent on supplies that have not yet been used.

Depreciation

The process of allocating the cost of a tangible asset over its useful life to account for declines in value over time.

Matching Statements

Accounting principles that dictate expenses should be matched with the revenues they helped to generate, ensuring accurate income statements.