3.6 THE DIRECT LABOR COST An accountant wishes to predict drect labor cost on th

Question

3.6 THE DIRECT LABOR COST An accountant wishes to predict drect labor cost on the basis of the batch size () of a product produced in a job shop. Data for 12 producion runs are given in the table below, along with the Excel output from fiting a least squares regression line to the data Direct Labor Cost Dats Batch Cost. y(3100s) Sze, x Direct Labor 138 83 23 100 435 772 75 Click here for the Excel Deta Fie Datch Sie (a) Find by and bo.(Provide your answers to 3 decimals places.) bo 9.480 (b) Intarpre Click to select} te interpretation of DO make practcal sense? bo is the batch sze mean labor cost is the estimated imean labor cost for every 1 unit decrease increase in batch size (G) Write the least squares preciction equaton.(Answers to 3 dealimal places 18.49 10.140 x (d) Use the least squeres line to obtain a poit esimate of the mean direct labor cost for all batches of sze 80 and a pont prediction of the direct labor cost for an individual batch of size 60. (Round your answer to 3 decimal places.) 60). 627.2468 hundreds of dolars.

Explanation / Answer

b0=18.488
b0=10.146
b1 is the estimated increase for every 1 unit os increase in batch size
c)Y=18.488+10.146x
d)when x=60
=18.488+(10.146*60)
=627.248

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