Refer to the Broadway Floral data in E6-25A. Use Microsoft Excel to do the following:

Requirements
1. Run a regression analysis.
2. Determine the company's cost equation (use the output from the Excel regression).
3. Determine the R-square (use the output from the Excel regression). What does Broadway Floral's R-square indicate?
4. Predict van operating costs at a volume of 16,500 miles assuming the company would use the cost equation from the Excel regression regardless of its R-square. Should the company rely on this cost estimate? Why or why not?

Transcribed Image Text:

Miles Driven 15,500 17,400 15,400 16,300 16,500 15,200 14,400 Van Operating Costs $5,390 Month January. February . March $5,280 $4,960 $5,340 April. May. $5,450 June $5,230 July $4,680