The Results of the Regression Analysis to Estimate Delivery Costs

question 66

Multiple Choice

The results of the regression analysis to estimate delivery costs are as follows:
Which of the following is an appropriate cost equation based on the above regression output?

• A) Delivery costs = $366.39 + $0.58 X₁, where X₁ is the number of cargos.
• B) Delivery costs = $0.662 + $2.985 X₁, where X₁ is the number of cargos.
• C) Delivery costs = $242.51 + $1.74 X₁, where X₁ is the number of cargos.
• D) Delivery costs = $48861.07 + $1.74 X₁, where X₁ is the number of cargos.

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Definitions:

Accounts Payable

Short-term liabilities representing amounts owed to suppliers or creditors for goods and services received that have not yet been paid for.

Raw Materials

The basic materials and substances that are used in the production of goods, often processed in various ways to create the final product.

Direct Labor Cost

The total expense of employing workers directly involved in manufacturing goods, including wages, benefits, and insurance.

Manufacturing Overhead

All indirect costs associated with manufacturing, including utilities, rent, and salaries for indirect labor.