Prepare a graph showing overhead costs plotted against tacos

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Reference no: EM131198725

Graphing costs and interpreting regression output (adapted from CMA exam). Management of Tino's Tacos wants to estimate overhead costs accurately to plan the company's operations and assess its financial needs. A trade association publication reports that certain overhead costs tend to vary with tacos made. Management gathered monthly data on tacos and overhead costs for the past two years for five taco restaurants. No major changes in operations were made over this time period. The data follow:

Month No. Number of Tacos Overhead Costs

1	.......................................	20,000	$42,000
2	.......................................	25,000	49,500
3	.......................................	22,000	44,750
4	.......................................	23,000	45,000
5	.......................................	20,000	40,750
6	.......................................	19,000	37,750
7	.......................................	14,000	35,250
8	.......................................	10,000	32,250
9	.......................................	12,000	34,500
10	.......................................	17,000	37,500
11	.......................................	16,000	35,750
12	.......................................	19,000	39,000
13	.......................................	21,000	43,000
14	.......................................	24,000	46,500
15	.......................................	23,000	46,500
16	.......................................	22,000	43,500
17	.......................................	20,000	40,000
18	.......................................	18,000	38,250
19	.......................................	12,000	33,750
20	.......................................	13,000	35,500
21	.......................................	15,000	36,750
22	.......................................	17,000	36,250
23	.......................................	15,000	35,500
24	.......................................	18,000	37,500

An analyst entered these data into a computer regression program and obtained the fol- lowing output:

Coefficients of the Equation:
Intercept $19,930
Independent Variable (slope) 1.0774

•Prepare a graph showing the overhead costs plotted against tacos.

•Use the results of the regression analysis to prepare the cost estimation equation and to prepare a cost estimate for 20,000 tacos for one month.

Reference no: EM131198725

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