Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:

Month	Machine Hours	Electricity Costs
January	3,400	$	18,850
February	3,800	$	21,900
March	2,800	$	13,950
April	4,000	$	23,900
May	4,700	$	28,700
June	4,200	$	22,900
July	5,300	$	25,200
August	4,400	$	23,200
September	2,900	$	16,400
October	4,600	$	26,900
November	6,500	$	31,900
December	5,800	$	28,200

Summary Output
Regression Statistics
Multiple R	.928
R Square	.862
Adjusted R2	.848
Standard Error	2,039.35
Observations	12.00

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	4,492.22	2,479.75	1.81	0.10	(1,033.00)	10,017.44
Machine Hours	4.35	0.55	7.89	0.00	3.12	5.58

If the controller uses regression analysis to estimate costs, the cost equation for electricity cost is:

Cost = $4,492.22 + $2,479.75 × Machine-hours.

Cost = $2,479.75 + $0.55 × Machine-hours.

Cost = $4,492.22 + $4.35 × Machine-hours.

Cost = $2,039.35 + $12.00 × Machine-hours.

Answer rating: 100% (QA)

Cost 203935 435 Machinehours ... View the full answer