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5. High-low Method = year ) 1 10 ( ) 00 . 1 95 . 1 $( = 0.1055 per year 6. Planing is important for an organization. If the manager does not plan well earlier in estimation of the area of storage space whether is fix with the quantity of stocks , number of emergency procedure will increase as the risk of facing insufficient storage due to over supply of stocks is high. 7. High-low Method Variable cost of activity per unit = levels activity in difference levels t in difference _ _ _ _ cos _ _ This method is used to calculate the variable and fixed cost components. Not confident as there is only 2 data are use to estimate cost behavior . Its not accurately represents the cost behavior within the relevant range. Simple Regression Y=a+bX Y : dependent variable ( total cost ) a : fixed cost component b : variable cost per unit X : independent variable (quantity of activity ) Regression utilises all of the data points given to determine the line of best fit , this allows us to make cost predictions and draw inferences about the relationship between cost of activity . Not confident as it only involves 1 dependent variable and 1 independent variable. Multiple regression Y= 2 2 1 1 x b x b a Regression estimates a linear relationship between 1 dependent variable and 2 or more independent variables Confident because its more accurate for cost predictions 8. As multiple regression involve more than 1 independent variables , it can show us more accurate cost for us to do the prediction in the future . So , its may give us more benefits in cost prediction and made the model ( multiple regression) more relevant .
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Transcript of MA tutor
5. High-low Method = year)110()00.195.1$(
= 0.1055 per year
6. Planing is important for an organization. If the manager does not plan well earlier inestimation of the area of storage space whether is fix with the quantity of stocks , number ofemergency procedure will increase as the risk of facing insufficient storage due to over supplyof stocks is high.7.High-low MethodVariable cost of activity per unit = levelsactivityindifference
levelstindifference___
_cos__
This method is used to calculate the variable and fixed cost components. Not confident as thereis only 2 data are use to estimate cost behavior . Its not accurately represents the cost behaviorwithin the relevant range.
Simple RegressionY=a+bXY : dependent variable ( total cost )a : fixed cost componentb : variable cost per unitX : independent variable (quantity of activity )Regression utilises all of the data points given to determine the line of best fit , this allows us tomake cost predictions and draw inferences about the relationship between cost of activity .Not confident as it only involves 1 dependent variable and 1 independent variable.Multiple regressionY= 2211 xbxba Regression estimates a linear relationship between 1 dependent variable and 2 or moreindependent variablesConfident because its more accurate for cost predictions8. As multiple regression involve more than 1 independent variables , it can show us moreaccurate cost for us to do the prediction in the future . So , its may give us more benefits in costprediction and made the model ( multiple regression) more relevant .
