Figure 3-8
The following computer printout estimated overhead costs using multiple regression:
During the year the company used 1,000 setup hours and 500 parts.
-Refer to Figure 3-8. What is the predicted overhead cost?
A) $2,500
B) $75,000
C) $76,000
D) none of these

Question

Figure 3-8
The following computer printout estimated overhead costs using multiple regression:
    During the year the company used 1,000 setup hours and 500 parts.
-Refer to Figure 3-8. What is the predicted overhead cost?
A) $2,500 
B) $75,000 
C) $76,000 
D) none of these

Quizplus · Accepted Answer

Using the regression formula provided in the table, predicted overhead cost equals $25,000 + ($50 x 1,000 setup hours) + ($100 x 500 parts) = $76,000. Therefore, the answer is C.

Figure 3-8 The Following Computer Printout Estimated Overhead Costs Using Multiple Regression