The cost accountants at the Doering Company regressed total overhead costs and direct labor hours for the past 30-months and reported the following results: What is the estimated overhead cost if 225 direct labor hours are expected to be used in the upcoming period? (rounded to the nearest whole dollar)
A)$10,534.
B)$9,882.
C)$9,230.
D)$8,617.

Question

The cost accountants at the Doering Company regressed total overhead costs and direct labor hours for the past 30-months and reported the following results:  What is the estimated overhead cost if 225 direct labor hours are expected to be used in the upcoming period? (rounded to the nearest whole dollar)
A)$10,534. 
B)$9,882. 
C)$9,230. 
D)$8,617.

Quizplus · Accepted Answer

Using the information from the regression equation, 
Estimated Overhead Cost = $1,225 + ($35.50 × Direct Labor Hours)
Substituting the given value of 225 direct labor hours,
Estimated Overhead Cost = $1,225 + ($35.50 × 225) = $9,882. Therefore, the answer is B.

The Cost Accountants at the Doering Company Regressed Total Overhead