The managerial accountant at Organic Beverage Factory used spreadsheet software to run a regression analysis scenario and compile the following monthly cost dа ta: Organic Beverage Factory Intercept coefficient X Variable 1 Coefficient R-square $4,286,652 28.21 0.6521 Which of the following is the correct estimated cost at a level of 8,000 units, based on the results of the regression analysis compiled by the managerial accountant? O A. $225,680 OB. $4,512,332 c. $4,286,652 D. $4,291,869

Question

Shirley Whitney

Business

20 July, 02:03

The managerial accountant at Organic Beverage Factory used spreadsheet software to run a regression analysis scenario and compile the following monthly cost dа ta: Organic Beverage Factory Intercept coefficient X Variable 1 Coefficient R-square $4,286,652 28.21 0.6521 Which of the following is the correct estimated cost at a level of 8,000 units, based on the results of the regression analysis compiled by the managerial accountant? O A. $225,680 OB. $4,512,332 c. $4,286,652 D. $4,291,869

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Answers (1)

Know the Answer?

Vasquez · Answer 1

B. $4,512,332

Explanation:

The computation of the correct estimated cost at a level of 8,000 units is shown below:

Given that

Intercept coefficient = $4,286,652

Variable 1 Coefficient = $28.21

R-square = 0.6521

Estimated cost at a level = 8,000 units

So, the regression equation is

$4,286,652 + $28.21X

For 8,000, the cost equation is

= Intercept + (X variable coefficient * units

= $4,286,652 + $28.21 * 8,000 units

= $4,512,332