For a simple regression analysis model that is used to alloc…

For a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is $14,000. The slope of the line is 0.2. The independent variable, factory wages, amounts to $810,000 for the month. What is the estimated amount of factory overhead to be allocated for the month?

A capital project requires a $150,000 initial investment. Th…

A capital project requires a $150,000 initial investment. The firm’s cost of capital (WACC) is 10 percent (after-tax), and the present value of the expected after-tax cash inflows from the project is $148,000. Should the firm accept the independent project?

Ohms Company manufactures plugs at $36 per unit, including $…

Ohms Company manufactures plugs at $36 per unit, including $8 of fixed overhead and $28 of variable manufacturing cost. Ohms needs 30,000 of these plugs annually (as part of a larger product it produces). Wire Company has offered to sell these units to Ohms at $33 per unit. If Ohms decides to purchase the plugs, $60,000 of the annual fixed overhead cost will be eliminated.3) Should Ohms Company manufacture or purchase plugs?

Nailor Company is accumulating data to use in preparing its…

Nailor Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow:  MonthMaintenance Cost (Y)Machine Hours (X)   January$ 4,700680   February3,500520   March4,100600   April3,320500   May4,850700   June3,460510   July3,530520   August4,970760   September4,760690   October4,550670   November3,800550   December3,660540     a (intercept)$ 3.86   b (coefficient)6.7892   Standard error of the estimate83.417   R-squared0.9838   t-value for b24.6683) The number determining the reliability of the regression equation for the maintenance activities is:

Maintenance expenses of a company are to be analyzed to cons…

Maintenance expenses of a company are to be analyzed to construct a flexible budget. Examination of past records disclosed the following costs and volume measures:   HighestLowest   Cost per month$ 42,000$ 34,000   Machine hours46,00030,0002) Using the high-low technique, estimate the annual fixed cost for maintenance expenditures ________