Answered: Overhead Costs Billable Hours 395000…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Related questions

Question

Overhead Costs	Billable Hours
395000	2000
440000	3000
460000	4000
513000	5000
580000	6000
605000	7000

Develop a simple linear regression model between billable hours and overhead costs.

Overhead

Costsequals=enter your response hereplus+left parenthesis nothing right parenthesisenter your response heretimes×Billable

Hours

(Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm?

Interpret the fixed term,

b 0b0,

if appropriate. Choose the correct answer below.

It is not appropriate to interpret

b 0b0,

because its value is the predicted billable hours for overhead costs of 0 dollars, but the firm cannot have overhead costs of 0 dollars associated with a client.

The value of

b 0b0

is the predicted overhead costs for 0 billable hours.

It is not appropriate to interpret

b 0b0,

because its value is the predicted overhead costs for 0 billable hours, but someone with 0 billable hours would not actually be a client of the firm.

For each increase of 1 unit in billable hours, the predicted overhead costs are estimated to increase by

b 0b0.

The value of

b 0b0

is the predicted billable hours for an overhead cost of 0 dollars.

For each increase of 1 unit in overhead costs, the predicted billable hours are estimated to increase by

b 0b0.

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,