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Lab Insight: In managerial accounting, we learned about cost behavior, specifically fixed costs (costs that don’t change with the number of goods or services produced) and variable costs (costs that vary with the level of output). Furthermore, a combination of some level of fixed costs and some level of variable costs are known as mixed costs (or semi-variable costs).
Often, firms don’t know the exact nature of their cost behavior. So, they may do various types of analyses, including regression analyses, to get a better handle on their cost behavior structure (i.e., the proportion of fixed costs and the proportion of variable costs).
Required:
- Use regression analysis to estimate the fixed and variable costs.
- Use regression analysis to understand if costs are different during the busy season.
- Use regression analysis to see if the company is better off incorporating the busy season into its cost behavior analysis.
Ask the Question: How can regression analysis be used to understand the cost behavior analysis for Thrustmaster?
Master the Data: Apply the same steps as Lab 8-3 to the Alt Lab 8-3 Data.xlsx dataset. Thrustmaster sells game controllers, joysticks, and steering wheels for PCs, Xbox, Nintendo, and Playstation consoles and sells most of its products during the Christmas season.
Thrustmaster is trying to estimate its cost behavior for its basic joystick using the Lab 8-3 Alt Data.
Software needed
- Excel
- Screen capture tool (Windows: Snipping Tool; Mac: Cmd+Shift+4)
Data: Alt Lab 8-3 Data.xlsx
Additional work needed to prepare the dataset for analysis:
- Insert a busy season variable with the value of “1” during the busy season from 7/2/2025 up to and including the week of 11/26/2025. Insert the value of “0” for all other weeks.
- Run the regression analysis similar to Lab 8-3, first considering only production.
- Next run a similar regression analysis for Lab 8-3, including the busy season variable and production.
Perform the Analysis: Refer to Lab 8-3 Alternate in the text for instructions and Lab 8-3 steps for each of the lab parts.
Upload the Word or PDF document containing your Lab screenshots using the button below.
Note: Please submit your file attachment response in one of the approved file formats; Word file (.doc or .docx), Excel file (.xls or .xlsx), or PDF. To submit photo or image files please paste them into Word or PDF. Consult with your instructor as needed on their preferred file attachment format.
Take a screenshot of the regression output for all fixed, variable, and busy season costing, paste it into a Word document named “Alt Lab 8-3 Excel SS.doc”, and label the screenshot Submission 1.