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 showing the correlation of monthly costs, based on the results of the regression analysis compiled by the managerial accountant is y = $28.21x + $4,286,652. This is because the regression analysis will provide a coefficient for x (in this case, x represents the independent variable of monthly costs) and a constant term (which represents the fixed monthly cost). Therefore, the correct equation should show the coefficient for x first, followed by the constant term. Choice D is the only option that follows this order, making it the correct choice.

The Managerial Accountant at Organic Beverage Factory Used Spreadsheet Software