Question: Accountants at the firm Michael Vest CPAs believed that severa

Accountants at the firm Michael Vest, CPAs, believed that several traveling executives were submitting unusually high travel vouchers when they returned from business trips. First, they look a sample of 200 vouchers submitted from the past year. Then they developed the following multiple-regression equation relating expected travel cost to number of days on the road (x1) and distance traveled (x2) in miles:
ӯ = $90.00 + $48.50xi + $.40x2
The coefficient of correlation computed was .68.
(a) If Wanda Fennell returns from a 300-mile trip that took her out of town for 5 days, what is the expected amount she should claim as expenses?
(b) Fennell submitted a reimbursement request for $685. What should the accountant do?
(c) Should any other variables be included? Which ones? Why?


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  • CreatedJuly 15, 2013
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