Financial Analysis and Decision Making in Business

School: Colorado State University, Fort Collins - Course: ACT 220 - Subject: Accounting

You DoChapter 6ACT 220 Question #1 Least-Squares Regression, Scatter graph, Comparison of Activity Bases Professor John Morton is reviewing the financedepartment's cost records, revealing thefollowing total costassociated with Finance 101 over the last five terms: TermNumber of Sections OfferedTotal Cost Fall, last year4$10,000 Winter, last year6$14,000 Summer, last year2$7,000 Fall, this year5$13,000 Winter, this year3$9,500 He would like to have the variable and fixed costs separated for planning purposes. 1.Prepare a scatter graph plot in Excel. (Plot total cost on the vertical axis and number of sections offered on the horizontal axis.)See separate instructions for how to create a Scatter Plot.Copy and paste your image here (you can also use the snipping tool). 2.(a)Using theleast-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. Fixed Cost perterm= Variable Cost persection= (b)Express these estimates in the formY = a + bX:

You DoChapter 6ACT 220 3.(a)Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offereight sections of Finance 101 during the Fall Term.Compute the expected total cost for Finance 101. Fixed Cost Variable Cost (# Sections x Cost/section) Total Cost