Question

Required information (The following information applies to the questions displayed below.) Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department's cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Number of Sections Offered Tern Fall, last year Winter, last year Sunner, last year Tall, this year Winter, this year Total Cont $ 12,000 $ 8.000 $ 8.500 $ 7.000 $ 13,000 Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. 2-a. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. 2-b. Express these estimates in the form Y a+bX Complete this question by entering your answers in the tabs below. Required 2A Required 28 Using the least squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Fixed cost per term Variable cost per section Required 28 > 2-a. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. 2-b. Express these estimates in the form Y = a +bX Complete this question by entering your answers in the tabs below. Required 2A Required 28 Using the least squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Fixed cost perform Variable cost per section Required 2 >

Answer 1

Variable and fixed costs for Finance 101 can be discerned using least-squares regression method, which determines the best-fitting line and its parameters, represented by Y = a + bX, where 'a' is fixed cost and 'b' is variable cost per section.

Step-by-step explanation:

Using the least-squares regression method, variable costs per section and fixed costs per term can be estimated for Finance 101 by calculating the linear relationship between the number of sections offered and the total costs. The least-squares regression technique will identify the line that best fits the provided data points, allowing us to determine both the variable cost (slope) and the fixed cost (y-intercept).

The cost structure can be represented by the equation Y = a + bX, where 'Y' is the total cost, 'a' is the fixed cost per term, 'b' is the variable cost per section, and 'X' is the number of sections offered. By inserting the cost data into the regression formula, the fixed and variable costs will be derived. These values are essential for proper financial planning within the department.