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Fundamentals of cost accounting

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2. A company ran a regression analysis using direct labor hours as the independent variable and manufacturing overhead costs as the dependent variable. The results are summarized below:

The company is planning to operate at a level that would require 12,000 direct labor hours per month in the upcoming year.

(a) Use the information from the regression analysis to write the cost estimation equation for the manufacturing overhead costs.
(b) Compute the estimated manufacturing overhead costs per month for the upcoming year.

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Solution Summary

Your response is in excel and shows you how to make a regression equation and then computes the forecast for you. Click on cells to see computation.