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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 583 |
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The cost data has a very strong relationship with the sales data and has very high R-squared. Unless Krog’s did something to manipulate the 2003 relationships, the estimates for 2004 are very strong. It would be very difficult for Krog’s to have foreseen the fire and manipulate their cost-volume relationships so that they could recover more on their loss...
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The only other evidence that Krog’s padded their data for the additional claim is that they only provided the 2003 data which may have been a very unique year for the cost-volume relationship. This could be done by increasing the costs in 2003 when the relationship is one that is less costly in earlier years...
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