Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 9

Regressions from Published Data
Obtain 13 years of data from the published financial statements of a company. You will be able to find the data on the Internet. Also, Moody's, Standard Poor's, and Value-Line are good sources of financial data. Using the first 12 years of data, perform a regression analysis in which the dependent variable is cost of goods sold and the independent variable is revenue (some companies call it sales ). Now use the results from the regression on the first 12 years of data to estimate the cost of goods sold for year 13. How far off was your estimate of cost of goods sold for year 13
Required
Prepare a report that describes your work and discusses reasons why your estimate of cost of goods sold is different than the actual cost of goods sold for year 13.