# FINANCE

DeMarco Company is developing a cost formula for its packing activity. Discussion with the workers in the Packing Department has revealed that packing costs are associated with the number of customer orders, the size of the orders, and the relative fragility of the items (more fragile items must be specially wrapped in bubble wrap and Styrofoam). Data for the past 20 months have been gathered:

,Required:

,1. Using the method of least squares, run a regression using the number of orders as the independent variable.

,2. Run a multiple regression using three independent variables: the number of orders, the weight of orders, and the number of fragile items. Which regression equation is better?

,Why?

,3. Predict the total packing cost for 25,000 orders, weighing 40,000 pounds, with 4,000 fragile items. Prepare a 99 percent confidence interval for this estimate of total packing cost.

Part 3 (Chapter 21) Because most of the parts for its irrigation systems are standard, Waterways handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually Using the Excel Workbook provided and the information provided below, prepare a Production Cost Report for Waterways Molding Department using the weighted-average method (Worksheet 3) The following information is available for the Molding department for January. Work in process beginning Units in process 25,000 Stage of completion for materials 75% Stage of completion for labor and overhead 40% Costs in work in process inventory: Materials \$175,325 67,500 Labor 16,850 Overhead Total costs in beginning work in process \$259,675 Units started into production in January 62,000 56,000 Units completed and transferred in January Costs added to production \$265,250 Materials 285,500 Labor Overhead 64,500 Total costs added into production in January \$615,250 Work in process ending: Units in process 31,000 Stage of completion for materials 60% Stage of completion for labor and overhead 20%

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