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regression analysis and time series

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › regression analysis and time series

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • November 24, 2014 at 2:16 pm #212677
    rumbidzai
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    the overhead cost for RP Limited have been found to be accurately represented by th fomula
    Y=$10000+$0.25X
    where Y is the monthly costs and Xrepresents the activity level measured as number of orders.
    Monthly activity levels of orders may be estimated using a combined regression analysis and a time series model
    a=100000+30b
    where a represents the de-seosonalised monthly activity level and b represents the month number.
    In month 240 the seasonal index value is 108
    REQUIRED
    Calculate the overhead costs for RP Limited for month 240 to the nearest $1000

    November 24, 2014 at 7:48 pm #212834
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54710
    • ☆☆☆☆☆

    In the formula a = 10000 + 30b, put b = 240 and so you get a = 17200

    The seasonal index is 108, so adjusting for seasonality gives 108/100 x 17200 = 18576

    Put this figure for X in the first formula and you will get the cost.

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