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1. In least-squares regression, independent variables are not included in the computations of
the slope and intercept.
2. Least-squares regression selects the values for the intercept and slope of a straight line
that minimize the sum of the squared errors.
3. When analyzing a mixed cost, you should always plot the data in a scattergraph, but it is
particularly important to check the data visually on a scattergraph when the R2 is very high.
4. Which of the following methods of analyzing mixed costs can be used to estimate an
equation for the mixed cost?
5. The least-squares regression method:
6. The management of Ferry Corporation would like for you to analyze their repair costs,
which are listed below:
Management believes that repair cost is a mixed cost that depends on the number of machine-
hours. Using the least-squares regression method, the estimates of the variable and fixed
components of repair cost would be closest to:
7. Moeller Inc.'s inspection costs are listed below:
Management believes that inspection cost is a mixed cost that depends on the number of units
produced. Using the least-squares regression method, the estimates of the variable and fixed
components of inspection cost would be closest to:
8. Your boss would like you to estimate the fixed and variable components of a particular
cost. Actual data for this cost over four recent periods appear below.
Using the least-squares regression method, what is the cost formula for this cost?
Descoteaux Inc.'s inspection costs are listed below:
Management believes that inspection cost is a mixed cost that depends on units produced.
9. Using the least-squares regression method, the estimate of the variable component of
inspection cost per unit produced is closest to:
2A-8
10. Using the least-squares regression method, the estimate of the fixed component of
inspection cost per month is closest to:
Carr Company reports the following data for the first six months of the year:
11. Using the least-squares regression method, the estimated variable electrical cost per
machine hour is closest to:
2A-10
12. Using the least-squares regression method, the estimated monthly fixed component of
the electrical cost is closest to:
Gelrud Corporation's recent utility costs are listed below:
Management believes that utility cost is a mixed cost that depends on machine-hours.
13. Using the least-squares regression method, the estimate of the variable component of
utility cost per machine-hour is closest to:
2A-12
14. Using the least-squares regression method, the estimate of the fixed component of utility
cost per month is closest to:
Recent maintenance costs of Prideaux Corporation are listed below:
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
15. Using the least-squares regression method, the estimate of the variable component of
maintenance cost per machine-hour is closest to:
