Methods of Estimating Costs: Simple Regression
Simple regression results from the data of Adriana Corporation are as follows:
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Equation: Overhead = $217,610 + ($88.61 × Labor hours) Statistical data |
|
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Correlation coefficient |
.610 |
|
R 2 |
.372 |
Required
Estimate overhead if the company expects the plant to operate at a monthly average of 3,000 laborhours next year.