A retailer wanted to estimate the monthly fixed and variable selling expenses. As a first step, she collected data from the past 8 months. The total selling expenses ($1,000) and the total sales ($1,000) were recorded and listed below.
Total Sales Selling Expenses
20 ............... 14
40 ............... 16
60 ............... 18
50 ............... 17
50 ............... 18
55 ............... 18
60 ............... 18
70 ............... 20
a. Compute the covariance, the coefficient of correlation, and the coefficient of determination and describe what these statistics tell you.
b. Determine the least squares line and use it to produce the estimates the retailer wants.