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
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.962
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R 2 .
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.925
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Required
Estimate overhead if the company expects the plant to operate at a monthly average of 9,000 machine-hours next year.