Simple Regression.The Environmental Controls Corporation (ECC) is a multinational manufacturer of materials-handling, accessory, and control equipment. During the past year, ECC has had the following cost experience after introducing a new fluid control device:

A. Calculate the mean, median, range, and standard deviation for output and each cost category variable.

B. Describe each cost category as fixed or variable based upon the following simple regression results where cost is the dependent Y variable and output is the independent X variable.

The first simple regression equation is

Cost1 = $13,123 €‘ $0.30 Output

Predictor    Coef  Stdev t ratio         p 

Constant     13123         2635 4.98  0.000

Output        €‘0.297         2.285          €‘0.13 0.899

SEE = $4,871 R² = 0.2 percent = 0.0 percent F statistic = 0.02 (p = 0.899)

The second simple regression equation is

Cost2 = $8,455 + $7.40 Output

Predictor    Coef  Stdev t ratio         p 

Constant     8455 1550  5.45  0.000

Output        7.397          1.345          5.50   0.000

SEE = $2,866 R² = 75.2 percent  = 72.7 percent F statistic = 30.26 (p = 0.000)

The third simple regression equation is:

Cost3 = €‘$662 + $12.7 Output

Predictor    Coef  Stdev t Ratio        p 

Constant     €‘661.5         488.4          €‘1.35 0.205

Output        12.7298      0.4236        30.05 0.000

SEE = $902.8 R² = 98.9 percent = 98.8 percent F statistic = 903.1 (p = 0.000)

Transcribed Image Text:

The Environmental Controls Corporation Cost2 Оирut Costl Cost3 S17,000 S11,000 so 1,000 100 10,000 7,000 200 2,000 8,000 13,000 500 6,000 20,000 10,000 900 14,000 12,000 10,000 1,000 8,000 19,000 11,000 16,000 1,200 15,000 13,000 1,300 14,000 15,000 15,000 1,400 6,000 16,000 18,000 23,000 1,500 18,000 19,000 22,000 1,700 8,000 21,000 1,900 16,000 25,000 24,000