Regression Methods to Develop a Function
A facility manager asked for information to help in forecasting handling costs. The following printout was generated using the least squares regression method:
Fixed cost: $2550
Variable cost per unit: 1.85
Activity variable: units of production volume
a. Using the info from the printout, develop a cost function that can be used to estimate handling costs at different volume levels.
b. Estimate handling costs if the expected production for next month is 20,000 units.
https://brainmass.com/business/accounting/regression-methods-develop-function -6205
Solution Preview
In this problem:
<br>y = Handling costs.
<br>a = Fixed cost = $2,550.
<br>b = Variable ...
Solution Summary
This solution sets up a cost function.
$2.49