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Mishern says

Hi John,

I have a Sharp EL-738F calculator which has a statistics mode that simplifies the linear regression calculations immensely. Once I’ve entered in the data pairs, it’s 3 keys to get the answers for a, b and r.

Is this permissible? Is there any other reason I would need to perform workings as you have shown in the lecture?

Maciej says

19:49 Sir, I cannot understand why we have 67,86 instead of 678,6. We calculated number of units in hundreds, so shouldn’t we multiply 6,786 by 100? There is no doubt that 6,786*100=678,6. Could you tell me why I am wrong? π

John Moffat says

It is because the costs are counted in thousands.

Fedor Belyakov says

Good day Dear John,

In simpple words can we say that….

After all calculation we assume that fixed cost remain the same and varibale cost increase in linear relation to quantity of produced items.

And the only problem can be that

In real life,for exmaple electricity supplier can increase varibale cost per unit after some Kilowats consumed.But our current calculation does take into accounts this factor.

Kindly asking for your advice

Thanks,

Fedor

John Moffat says

Costs can be fixed or variable or semi-variable (part fixed and part variable).

The cost per unit certainly can change over different ranges of units, and so can the fixed cost (which is then a stepped cost).

We can deal with all of them (and could well be asked to in the exam – but not as part of a question on regression analysis).

This is all explained in the lecture that goes with Chapter 4 of our lecture notes. (The lectures are supposed to be watched in number order π )

Jegan says

Thank you sir, much appreciated π

Jegan says

I calculated from this question that was in the revision lecture for the topic Semi-Variable Costs: Regression:

b = 67.86 (2 d.p.)

a = 32857.14 (2 d.p.)

Is this correct?

John Moffat says

You can see from the lecture and from the printed answers that it is correct!!

kassy says

hello! i am sorry about my silly question but i noticed that:

we write: a=60 – (6.78*28)/7 = 60-27.12= 32.88

but as we can see 60 is actually 60.000 and 28 is actually 2.800. (and not 28000 as we took it above)

so it gives us a=60000 – (6.78*2800)/7= 60000- 2712=57.288

or maybe not?

kassy says

dont waste your time, i fixed it!!!

John Moffat says

I was just about to reply and explain, but you save me the time π

Glad you fixed it!

Ahsan says

b is a variable cost per unit, cost are in (000) and units are in (00) thus variable cost per unit b is moved one decimal place as 1000/100 = 10. is my guessing right

John Moffat says

That’s correct π

Lewis says

is the regression formulae given in the F5 exam?

it isn’t mentioned at the start of your course notes for F5…

Thanks

John Moffat says

I really do not know why you have posted this in the Paper F2 forum.

If you have read the lecture notes for Paper F5, you will have seen in the first paragraph of the relevant chapter that you cannot be asked calculations on regression analysis in Paper F5. For that reason you are not given the formulae – you cannot be expected to use them!

ko says

Sir if you don’t mind can i get some quizs that something look like ex2?

because i read new formula from management accounting book sales in korea

so i want to proof it new formula is work

John Moffat says

Sorry, but I really do not know what you mean. If you have a book then surely the book will explain?

Otherwise you should watch the lecture again.

If the answers in your book do not make sense, then ask in the Ask the Tutor Forum for Paper F2,

(and I do assume that you have tried our practice test for Paper F2?)

ko says

Sorry my Eng skill is really horrible x(

I have found other formula to slove the example2 and I am wondering whether the formula works or not so if you don’t mind can I get some quizzes like that?

khansalmanali says

Hi John,

I’ve a confusion. You have placed this lecture within F5 also. Regression and Time Series are not part of F5. Right?

John Moffat says

Wrong!

For F5 this is assumed knowledge from Paper F2.

If you are studying F5 then I assume you will have been watching our lectures without free lecture notes in front of you (otherwise there is no point in watching the lectures). In that case you will have read the introductory paragraph in chapter 12 – especially the part in bold letters!

In future please do not ask about Paper F5 as a comment to a Paper F2 lecture.

adnan says

please disregard my question.

Amit says

Dear John,

I have the same doubt as Sashen and the same seems to have been missed by you. 100s would mean we had to move 2 decimal places which you moved just 1. is there a specific reason or it was missed inadvertently.

Thanks

Amit

John Moffat says

The cost moves it three decimal places, and the units moves it two decimal places the other way π

Chris says

Yes Sir, i agree with you because some of us students are not too mathematical.

The costs gives us exactly 32857.2 when multiplied by 1000. Approximately we have 32,857 in ‘000’ while 6.7857 when multiplied by 1000 by gives 6785.7 approximately to 2 d.p we got 67.87 ’00’. I must confess, i was initially confused.

Thank you so much for your explicit and simple way of lecturing global students.

We appreciate you.

John Moffat says

You are welcome, and thank you for the comment π

Anthony says

please disregard/ delete this post…half of my post was cut off…….the full question is above…thanks

Anthony says

Hi

Should the cost in 1000s on the 4th line in fact read 85 as opposed to 80? I am using the lecture notes from F5 but the above lecture from F2

Also, the answer in the back of the lecture notes show the answer as

y= 31.430 + 73.21x

Should this in fact read y=31,430 + 73.21x ? as per your answer in the lecture? (allowing for the variance in numbers due to the different value of the 4th line?

many thanks

John Moffat says

The fourth line in the answer does read 85 and so your first question is puzzling me.

As regards the 31.430 – yes, indeed it should read 31,430 (and comparison with the high low equation confirms that). It is just a typing error.

Incidentally, if you are studying for Paper F5 then I do hope you read the first paragraph of the chapter. Calculations on regression analysis can no longer be asked – you can only be expected to be aware of the idea. It is only in F2 that calculations can be asked.

Anthony says

I was referring to your answer in the lecture…your 4th line reads as 80 in the lecture.

Yes, I am aware of that…I was going through the example to gain a broad understanding of regression

Many thanks for the quick reply…much appreciated

John Moffat says

The cost moves it three decimal places, and the units moves it two decimal places the other way π

Sashen says

Hi Sir

I would like to know in the final Equation:

y = 32857 + 67.86x

I understand that 32.857 the decimal moved to the right because there was 3 zeros in the cost figure.

I would like to know why did 6.7857 only moved one decimal place ?

John Moffat says

It is because the units are in hundreds.

Sashen says

I understand but I would assume that hundreds would move two decimal places since 100 has two zeros ?

Munazza says

Great Explanation…Thanks alot Mr. John!

As i understand regression method is only to overcome the drawback of high low method, give the point that can approximately across all our observation…

Am i right Sir! as my understanding…

John Moffat says

Its more than that π

Regression analysis is the most accurate way of finding the relationship between two variables (assuming that it is more or less linear). The high-low method is simply a quick approximation that can lead to very inaccurate results.

Munazza says

and also this analysis is more accurate if the degree of correlation between x , y is high. Now i understand better after taking the next lecture….Thanks for your support.

Arnaud says

Interesting lectures. Very easy to understand. Thank you a lot Mr Moffat!

John Moffat says

You are welcome, Arnaud.

Gabriella says

Thank you very much for the lectures. I have been learning a lot since I started studying with OT and the most important it is that I am really enjoy doing it.

John Moffat says

Thats great, thank you π

John Moffat says

Thank you π

David says

Where did u get N=7 in Example 2???

John Moffat says

I assume that you had the example in front of you (in the free Course Notes that are needed to watch the lectures).

In which case you will se that there are 7 sets of observations – January through to July. N is the number of sets of observations.

David says

Thank you. My mistake

John Moffat says

No problem – you are welcome π

SanjeSashana says

Hello, Mr. Moffat

I am trying to understand as to how you came across the way to get back the variable cost (b) and the fixed cost (a) back into its actual cost, as in if we never did the substituting to make the arithmetic quicker. Just to see if I was right, is this because if I transposed the formulae “y = a + bx” to suit ‘a’ and ‘b’, as in: a= y – b/x and b = y/x – a,

– in a’s case you would only have to multiply by 1000 because the ‘y’ costs in the formulae were not being divided by the ‘x’ units.

-and in b’s case you would have to multiply by 1000 (y costs) and also divide by 100 (x units) because ‘y’ was being divided by ‘x’. ?

John Moffat says

That is correct π

SanjeSashana says

Ohh, thank you Mr. Moffat :). I really appreciate what you are doing for us.

Carlinton says

Sorry sir it was an oversight on my part. I got it now, thank you.

Erica says

sir, the part where b is calculated and the answer obtained in the calculator is 6.785714286 to how decimal places do we write it as the answer??

John Moffat says

Usually 2 (so 6.79) unless the question says different.

(However, you will not be penalised if you write more decimal places!)

jay0v says

Are the formulas for a & b provided in exam or do we have to learn them.?

John Moffat says

They are given – you can find the formulae sheet at the front of the OpenTuition Course Notes.

Petter says

Dear Mr. John,

I don’t quite get why the final b is 67.86 instead of 678.6 because the units are in hundreds.

Please enlighten me.. thank you

Petter says

I’ve figured it out, thanks π

SMarT_CNO says

Please give me the trick am also lost

John Moffat says

It because the units are in hundreds and the costs are in thousands. So we need to multiply by 1000 and divide by 100.

SMarT_CNO says

Got it. thanks a lot.

John Moffat says

Great π

Ehtisham says

HI,

Is public perception matter in the authorization for any post of a organization??????????

John Moffat says

This has nothing to do with Paper F2/FMA !

I suggest that you ask yor question in the relevant forum.

Ehtisham says

Hi, why open tuition have not video lecture for MA1 and FA1?

How often time video lectures are up grated and when….?

John Moffat says

I have answered your first question below.

As far as upgrading is concerned, the lectures and notes are reviewed every six months and are updated whenever there is a change in the syllabuses.

Ehtisham says

Hi, open tuition haven’t video lecture for MAI and FA1.

And…..,your video lectures are very supportive for us but they may be more supportive if simple and easy wording used in them. Thanks.

John Moffat says

No – there are no video lectures for MA1 and FA1. We only introduced course notes for these papers recently – if there is the demand then we will produce video lectures when we have the time available.

With regard to the wording, these lectures were recorded in a class of non-English students and the words used are very much the words that are used in the exams.

nannim says

Hmmmm! Interesting lecture by Mr. John, Though am not doing ACCA for now but I must admit that it’s wonderful and educative to me.

mahoysam says

lol Mr John, you are funny in the class room! I remember when I took that lesson in F2 I was going to real classes not online and the tutor simply asked us to open the book and solve the formula without any explanation and the formula actually looks scary but it is easy if it is explained because it is nothing but working out numbers! I studied it on my own at home later and I knew it is simple but he had to explain what these symbols mean!!! I didn’t even know what sigma means, how am I supposed to solve it!!!

John Moffat says

Thanks π

mahoysam says

It is us who should thank you Mr John! π

sdmaalex says

Thanks alot for the lectures. They are very helpful. But i guess the total of Y should be 425000 and the total of X*Y should be 190500000.

John Moffat says

The totals in the lecture are correct. Are you sure that you have got the correct numbers for each of the Y’s, because the total does come to 420. (OK it is really 420,000 but it is more sensible to work in ‘000’s – it makes the arithmetic quicker and does not affect the answer.)

sdmaalex says

By the way, do we have to study the Regression Analysis? Because I thought they removed it from the syllabus. π

John Moffat says

As it says in the Course Notes, although regression is no longer listed in the syllabus, it is still assumed knowledge from Paper F2. You will not be asked calculations but you are still expected to be aware of the idea.

no1lover says

actually sdmaalex is correct about the total Y’s being 425, because April Cost is 85000 not 80000 in the course notes, Thats why he/she came up with that total. But really good lecture and thanks

hlony says

Why didnt we do the same with the b;that is multiplying it with 1000 and then devide by 100?it kind of confuses me.

John Moffat says

Did you really mean ‘b’ (the variable cost per unit)? If you did, then see my answer to this below.

If you meant to type ‘a’ (the fixed cost) then we only need to multiply by 1000 because the costs were in thousands. (We do not need to divide by 100 because we are not multiplying ‘a’ by the units (which are in 100’s).

Leila says

Is this John in action? π Thank you again for the lectures. You are awesome!

John Moffat says

Yes it is, and thank you very much π

kclsean says

Hi Sir

Why is Variable cost per unit only multiplied by 10 instead of 100 from 6.7857 to 67.86 ?

John Moffat says

The costs are in thousands, and so we multiply by 1,000. But then the units are in hundreds, so we divide by 100.

latoyah says

Thanks Opentuition

John Moffat says

@latoyah, You are welcome π

hixam says

I have Heard today they have removed, correlation, regression, n time series from tha june 2013 syllabus n have added another chapter, Could you please let us know about it. it was just recent update

abeer1393 says

is this true ?

John Moffat says

The syllabus change was announced last year – you can see the new syllabus and the changes on the ACCA website, there are many posts on our website about it, and of course there is a big article in the Student Accountant.

Correlation and regression, and time series have indeed been removed from the syllabus because they are assumed knowledge from Paper F2. The examiner has said that you will not be asked for calculations although you are still expected to know what the topics are.

Basic variances have also been removed – again because they are assumed knowledge – however you can still be asked calculations of basic variances and also understanding the rules for basic variances is necessary to be able to do planning and operational variances.

latoyah says

This had looked really hard before but now i finally understand it. I still hope it dont come on the F5 paper