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    Cost Volume Profit and Regression Analysis Garvin Corporation M

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    trilocksp Singh
    Garvin Corporation manufactures children's bicycles and currently makes their own frames. In 2009, Garvin made 30,000 frames for a total cost of $900,000, resulting in an average cost of $30 per frame. Ryan Corporation offered to supply frames for $28.50 each. A regression equation estimated total manufacturing costs as $432,000 + $15 per frame. Using this, it would cost Garvin $528,000 to make 36,000 frames, more than the $1,026,000 it would cost to buy them from Ryan. Additional data would be needed to validate the regression model.

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    Cost Volume Profit and Regression Analysis Garvin Corporation M

    Uploaded by

    trilocksp Singh
    32 views1 page
    Garvin Corporation manufactures children's bicycles and currently makes their own frames. In 2009, Garvin made 30,000 frames for a total cost of $900,000, resulting in an average cost of $30 per frame. Ryan Corporation offered to supply frames for $28.50 each. A regression equation estimated total manufacturing costs as $432,000 + $15 per frame. Using this, it would cost Garvin $528,000 to make 36,000 frames, more than the $1,026,000 it would cost to buy them from Ryan. Additional data would be needed to validate the regression model.

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    Garvin Corporation manufactures children's bicycles and currently makes their own frames. In 2009, Garvin made 30,000 frames for a total cost of $900,000, resulting in an average cost of $30 per frame. Ryan Corporation offered to supply frames for $28.50 each. A regression equation estimated total manufacturing costs as $432,000 + $15 per frame. Using this, it would cost Garvin $528,000 to make 36,000 frames, more than the $1,026,000 it would cost to buy them from Ryan. Additional data would be needed to validate the regression model.

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    © All Rights Reserved
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    Download as pdf or txt
    32 views1 page

    Cost Volume Profit and Regression Analysis Garvin Corporation M

    Uploaded by

    trilocksp Singh
    Garvin Corporation manufactures children's bicycles and currently makes their own frames. In 2009, Garvin made 30,000 frames for a total cost of $900,000, resulting in an average cost of $30 per frame. Ryan Corporation offered to supply frames for $28.50 each. A regression equation estimated total manufacturing costs as $432,000 + $15 per frame. Using this, it would cost Garvin $528,000 to make 36,000 frames, more than the $1,026,000 it would cost to buy them from Ryan. Additional data would be needed to validate the regression model.

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    © All Rights Reserved
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    Solved: Cost volume profit and regression analysis Garvin

    Corporation m
    Cost volume profit and regression analysis Garvin Corporation m

    Cost-volume-profit and regression analysis. Garvin Corporation manufactures a children’s


    bicycle, model CT8. Garvin currently manufactures the bicycle frame. During 2009, Garvin
    made 30,000 frames at a total cost of $900,000. Ryan Corporation has offered to supply as
    many frames as Garvin wants at a cost of $28.50 per frame. Garvin anticipates needing 36,000
    frames each year for the next few years.
    1. a. What is the average cost of manufacturing a bicycle frame in 2009? How does it compare
    to Ryan’s offer?
    b. Can Garvin use the answer in requirement la to determine the cost of manufacturing 36,000
    bicycle frames? Explain.
    2. Garvin’s cost analyst uses annual data from past years to estimate the following regression
    equation with total manufacturing costs of the bicycle frame as the dependent variable and
    bicycle frames produced as the independent variable:
    y = $432,000 + $15X
    During the years used to estimate the regression equation, the production of bicycle frames
    varied from 28,000 to 36,000. Using this equation, estimate how much it would cost Garvin to
    manufacture 36,000 bicycle frames. How much more or less costly is it to manufacture the
    frames rather than to acquire them from Ryan?
    3. What other information would you need to be confident that the equation in requirement 2
    accurately predicts the cost of manufacturing bicycle frames?

    Cost volume profit and regression analysis Garvin Corporation m

    ANSWER
    https://solvedquest.com/cost-volume-profit-and-regression-analysis-garvin-corporation-m/

    Reach out to freelance2040@yahoo.com for enquiry.


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