# Question

Form groups of two or more students to complete the following requirements:

REQUIRED

1. Given your findings in Problem 10-28, should Hanks use multiple regression analysis to better understand the cost drivers of overhead costs? Explain your answer.

2. Hanks decides that the simple regression analysis in Problem 10-28 should be extended to a multiple regression analysis. She finds the following result:

♦ Regression 3. Overhead costs = a + (b, X number of academic programs) + (b2 X number of enrolled students)

The coefficient of correlation between number of academic programs and number of students is 0.60. Use the format in Exhibit 10-13 to evaluate the multiple regression model. Should Hanks choose the multiple regression model over the two simple regression models of Problem 10-28?

3. How might the president of Eastern University use these regression results to manage overhead costs?

REQUIRED

1. Given your findings in Problem 10-28, should Hanks use multiple regression analysis to better understand the cost drivers of overhead costs? Explain your answer.

2. Hanks decides that the simple regression analysis in Problem 10-28 should be extended to a multiple regression analysis. She finds the following result:

♦ Regression 3. Overhead costs = a + (b, X number of academic programs) + (b2 X number of enrolled students)

The coefficient of correlation between number of academic programs and number of students is 0.60. Use the format in Exhibit 10-13 to evaluate the multiple regression model. Should Hanks choose the multiple regression model over the two simple regression models of Problem 10-28?

3. How might the president of Eastern University use these regression results to manage overhead costs?

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