# Question

The file COSTEST 3 on the CD contains data on production runs at a manufacturing plant. There are two columns of data:

y= COST is the total cost of the production run

x= NUMBER is the number of items produced during that run

Run the regression using COST as the dependent variable and NUMBER as the independent variable and use the result to help answer the following questions:

A: what is the estimated regression equation relating y to x?

B: What percentage of the variation in y has been explained by the regression?

C: Are Y and x linearly related? Conduct a hypothesis test to answer this question and use a 5% level of significance. State the hypotheses to be tested, the decision rule, the test statistic, and your decision. What conclusion can be drawn from the result of the test?

D. Estimate the fixed cost involved in the production process. Find a point estimate and a 95% confidence interval estimate.

E. Estimate the variable cost involved in the production process. Find point estimate and a 95 % confidence interval estimate.

Place this in a single workbook on separate sheet (Excel). Answer the question below the output and clearly label the answers. I don't want mere numbers for answers. Justify your answers by referring to the output and explain them in the context of the problem. You don't have to calculate any number which is found on the output, just use it. Write a quantitative report.

NUMBER COST

30 ...........94

35...........109

32..........99.5

33...........100

30..........91.5

29..........85.5

24..........80.5

20..........74.5

22.............79

27.............85

26..........81.5

29.............88

31.............96

34...........103

33...........103

32...........97

30.............90

28..........86.5

22..........77.5

23............81

25..........83.5

27..........82.5

25...........81

28...........85

y= COST is the total cost of the production run

x= NUMBER is the number of items produced during that run

Run the regression using COST as the dependent variable and NUMBER as the independent variable and use the result to help answer the following questions:

A: what is the estimated regression equation relating y to x?

B: What percentage of the variation in y has been explained by the regression?

C: Are Y and x linearly related? Conduct a hypothesis test to answer this question and use a 5% level of significance. State the hypotheses to be tested, the decision rule, the test statistic, and your decision. What conclusion can be drawn from the result of the test?

D. Estimate the fixed cost involved in the production process. Find a point estimate and a 95% confidence interval estimate.

E. Estimate the variable cost involved in the production process. Find point estimate and a 95 % confidence interval estimate.

Place this in a single workbook on separate sheet (Excel). Answer the question below the output and clearly label the answers. I don't want mere numbers for answers. Justify your answers by referring to the output and explain them in the context of the problem. You don't have to calculate any number which is found on the output, just use it. Write a quantitative report.

NUMBER COST

30 ...........94

35...........109

32..........99.5

33...........100

30..........91.5

29..........85.5

24..........80.5

20..........74.5

22.............79

27.............85

26..........81.5

29.............88

31.............96

34...........103

33...........103

32...........97

30.............90

28..........86.5

22..........77.5

23............81

25..........83.5

27..........82.5

25...........81

28...........85

## Answer to relevant Questions

Label the following transactions: a. A Nevada Corporation formed a corporation in Florida and transferred all assets to it for 100 percent of its stock. It then distributed the stock to its shareholders in cancellation of ...Zigs Industries had the following operating results for 2011: sales = $27,960; cost of goods sold = $19,360; depreciation expense = $4,940; interest expense = $2,190; dividends paid = $1,050. At the beginning of the year, ...Jayne Nopen, CPA, prepares tax returns. The production costs and the number of tax returns prepared for the month of September are as follows:Direct materials ........$ 200CPA staff salaries .......4,000Overhead ...X in State A and Y in State B plan to enter into a contract. What can they do to avoid the impact of fluctuations in the value of their money of account?Rambo Enterprises, Inc. stock has a beta of 1.12. The risk-free rate of return is 2.46 percent and the market risk premium is 5.26 percent. What is the expected rate of return on this stock?Post your question

0