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Analysis ToolPak Installation Step 1 File/Options 3
Citation preview
Analysis of Mixed Cost—Using Excel Regression
Functionfor
Professor Martin Taylor
Presented by Wenxiang Lu
Excel Setup: Analysis ToolPak Installation
• Analysis Toolpak is NOT pre-installed with Excel 2010 or 2013• We need to install and load it before we can use the statistical
functions.• Mainly four steps to install Analysis ToolPak.• File/Options/Add-Ins/Manage/Analysis ToolPak
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Analysis ToolPak Installation
• Step 1
• File/Options
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Analysis ToolPak Installation
• Step 2
• File/Options/Add-Ins
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Analysis ToolPak Installation
• Step 3• File/Options/Add-Ins/Manage• Click “Go”
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Analysis ToolPak Installation
• Step 4:• File/Options/Add-Ins/Manage/Analysis ToolPak
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Analysis ToolPak Installation
• The “Data Analysis” button is added to the Analysis group under Data tab.
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Review: High-Low• Total mixed cost = Total fixed cost + total variable cost Y = a + b* X
Where, Y = Total mixed cost a = Total fixed cost b = Variable cost per unit = = X = the level of activity
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Review: Regression• Statistical technique for estimating the relationship between the independent variable(s) and the dependent variable.• Two basic types:
Simple regression: Y = a + bX + ε Multiple regression: Y = a + b1X1
+ b2X2 + B3X3 + ... + BtXt + ε
• Where, Y = dependent variable (the variable that we are trying to predict)X = independent variable (the variable that we are using to predict Y)a = intercept b = slope ε = error term.
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MonthUnits
(Meals) Total CostJanuary 1280 $6,720 February 1810 $7,260March 1620 $7,270April 2830 $11,060May 3630 $12,580June 2610 $8,660July 2460 $8,580August 2640 $9,550September 3620 $13,050October 2840 $11,060November 1820 $7,320December 1650 $7,370January 1260 $6,790February 1850 $7,480March 1710 $6,990April 2940 $11,400
Regression Data 1
• High-Low Method
Y= 3,723 + 2.44*X
• Regression Method
Y= 2,618.7 + 2.8*X
**Y=Total cost X= number of meals
High
Low
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Microsoft Excel Worksheet
Patient
DaysMaintenance
Costs
Month X Y
January 5600 $7,900
February 7100 $8,500
March 5000 $7,400
April 6500 $8,200
May 7300 $9,100
June 8000 $9,800
July 6200 $7,800
Regression Data 2
• High-Low Method
Y=3,400 + 0.8*X
• Regression Method
Y=3,431 + 0.75*X
**Y=Total maintenance cost X= number of patient days
High
Low
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Microsoft Excel Worksheet
Number of Orders
Billing Costs in $
1500 420001900 460001000 370001300 430002800 540001700 470002100 510001100 420002000 480002400 530002300 49000
Regression Data 3
• High-Low Method
Y=27,560 + 9.44*X
• Regression Method
Y=30,644.5 + 8.7*X
**Y=Total billing cost X= number of orders
High
Low
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Microsoft Excel Worksheet
Summary: High-Low vs. Regression• Total mixed cost = Total fixed cost + total variable cost Y = a + b* X
Where, Y = Total mixed cost a = Total fixed cost (the vertical intercept of the regression line) b = Variable cost per unit = (the slope of the regression line) X = the level of activity
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Which method is more accurate?
• High-Low
• Regression ˅
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THANK YOU!
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