Multiple regression, Managerial Accounting

Assignment Help:

MULTIPLE REGRESSION

The least square regression equation discussed above was based on the assumption that total cost was determined by only one activity based variable. However, other variables are likely to affect labour costs such as labour hours, material costs, machine hours, etc. These may have an effect on labour costs.

The equation for the simple regression can be expanded to include more than one independent variable as shown below:

Y = a + b1X1 + b2 X2 + b3 X3 +………+bn Xn

For two independent variables, the function will be of the form:

Y = a + b1X1 + b2 X2

The normal equations can be given by:
∑y      = na + b1 ∑X1 + b2∑x2
∑X1Y  = a∑x1 + b1∑X12 + b2 ∑X1 ∑X2
∑X2 Y = a∑x2 + b1∑  X 1∑X2 +b2 ∑X2 

Normally computers are used for the solution of multiple regression.


Related Discussions:- Multiple regression

Cost anlysis, briefly discuss five characteristics of relevant cost

briefly discuss five characteristics of relevant cost

Cost classifications, explain briefly variable cost, fixed cost and semi- v...

explain briefly variable cost, fixed cost and semi- variable in the production cost of a productor service, giving example for each

#titlCase Study - Labor standards, Case Study Labor standards Geeta & Comp...

Case Study Labor standards Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The company is conside

Significance points of variance, Significance points of Variance The fo...

Significance points of Variance The following significant points must be kept in mind: Controllability:   Controllability should also influence the decision whether t

Project, Ask question #MRead ALL instructions before getting started! ABC ...

Ask question #MRead ALL instructions before getting started! ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014. Given on th

Transfer pricing-purposes, Transfer Pricing Transfer pricing can contri...

Transfer Pricing Transfer pricing can contribute directly to the process of departmental performance measurement and indirectly to the measurement of product performance. A

Interger programing emuneration method, #questihow do we use emuneration me...

#questihow do we use emuneration method in interger programing

Homework.., given the above data what would the breakeven in units and doll...

given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _

Inventory control, INVENTORY CONTROL The activities of a business durin...

INVENTORY CONTROL The activities of a business during a financial year combine investment projects in progress with new projects commencing and others terminate within the year

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd