The managerial accountant at Organic Beverage Factory used spreadsheet software to run a regression analysis scenario and compile the following monthly cost data:
Which of the following is the correct cost equation showing the correlation of monthly costs,based on the results of the regression analysis compiled by the managerial accountant?

Question

The managerial accountant at Organic Beverage Factory used spreadsheet software to run a regression analysis scenario and compile the following monthly cost data: 
Which of the following is the correct cost equation showing the correlation of monthly costs,based on the results of the regression analysis compiled by the managerial accountant?

Quizplus · Accepted Answer

The correct cost equation should show the independent variable (x) first, followed by the coefficient for x (28.21), and then the intercept (4,286,652) which represents the fixed costs. Therefore, the correct equation is y = $28.21x + $4,286,652, which is shown in option D.

The Managerial Accountant at Organic Beverage Factory Used Spreadsheet Software