Below Are Cost and Activity Data for a Particular Cost

question 6

Essay

Below are cost and activity data for a particular cost over the last four periods. Your boss has asked you to analyze this cost so that management will have a better understanding of how this cost changes in response to changes in activity.
Required:
Using the least-squares regression method, estimate the cost formula for this cost.
n = 4
sumX = 180
sumY = 1,382
sumXY = 62,247
sumX^2 = 8,110
b = [n(sumXY)-(sumX)(sumY)]/[n(sumX^2)-(sumX)^2]
= [4(62,247)-(180)(1,382)]/[4(8,110)-(180)^2]
= $5.70 (rounded to nearest whole cent)

---

Definitions:

Central Planning

A system where the government or a centralized authority makes all decisions about the production and distribution of goods and services.

Industry Output

The total production of goods and services by all firms in a particular industry over a specific time period.

Chain Reaction

A sequence of reactions where a reactive product or by-product causes additional reactions to take place, often leading to a self-sustaining series of events.

Enterprise Success

The achievement of desired business outcomes, such as profitability, market share growth, and innovation.