Methods of Estimating Costs: Simple Regression
Simple reression results from the data of Adriana Corporation are as follows:
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Equation: Overhead =$206,469 + ($45.83 × Machine hours) Statistical data |
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Correlation coefficient |
.962 |
|
R 2 . |
.925 |
Required
Estimate overhead if the company expects the plant to operate at a monthly average of 9,000 machine hours next year.