BUACC2613 Management Accounting

Management wishes to determine the cost behaviour patterns to help with the preparation of next year’s budget. The firm produces widgets and has provided the following data. Data regarding the number of units produced, maintenance hours and costs for last year are as follows

5. Compute the least-squares regression estimate of the variable and fixed-cost components. All manual calculations will need to be shown. This will incorporate the following calculations.
   • The coefficients of both the intercept and x variable
   • The coefficient of determination, r²measures the percentage of variation in Y explained by X (the independent variable). I.e. the proportion of the change in the dependent variable that is explained by the change in the independent variable.
   • Standard Error of Estimate: A measure of the reliability of the estimating equation.
   • The standard error of both the intercept and x variable.
   • The t-stat. will need to comment and explain what these mean and their significance

5. Use multiple regression analysis to estimate the behaviour of the indirect labour costs.Because there are two independent variables, it is necessary to use multiple regression analysis, utilising Excel.Calculate the total variable cost and the fixed cost per indirect labour hour at 600 hours and 87000 widgets. Explain the problems might occur when using fixed cost per hour in decisions.How well do the regressors, taken together, explain the variation in the dependent variable
6. Are the regressors, taken together, significantly associated with the dependent variable What relationship does each regressor have with the dependent variable when all other regressors are held constant Which regressor has most effect on the dependent variable Are the relationships of each regressor with the dependent variable statistically significant, with all other regressors taken into account.