Question:
Assume that six monthly observations of indirect manufacturing costs y and machine hours x are to be used as a basis for developing the cost-volume formula y'= a + bx. The sums are available as Xx= 570 Xy = 3,785 Zxy = 364,000 Ex2 = 55,000 Zy2= 2,413,925
(a) Determine the fixed cost and the variable rate using the method of least squares.
(b) Compute the coefficient of determination.