A firm wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis performed using Excel 2007 showed the following information:

1. Given this output, write the firm€™s monthly cost equation.
2. Should management use this equation to predict monthly operating costs? Explain your answer.

SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.87 0.86 0.84 398.49 ANOVA df MS F 14.89886 Significance F 0.0032 Regressiorn Residual Tota 2365870.5 2365871 158795 1587954.5 3953825 Lower Upper 95% Lower Upper 95.0% 95.0% Coefficients 9942.83 0.89 Standard Error 406.44 0.23 t Stat 24.46 3.86 p-value 2.97 0.00 95% Intercept X Variable 1 9037.23 10848.43 9037.23 10848.43 1.40 0.37 1.40 0.37