# Refer to the data in Exercise 3.17. In Exercise 3.17 Required: 1. Compute the cost formula for radiology services using the method of least squares. 2. Using the formula computed in Requirement 1, what is the predicted cost of radiology

Refer to the data in Exercise 3.17.

In Exercise 3.17

In Exercise 3.17

Required:

1. Compute the cost formula for radiology services using the method of least squares.

2. Using the formula computed in Requirement 1, what is the predicted cost of radiology services for October for 3,500 appointments?

3. What does the coefficient of determination tell you about the cost formula computed in Requirement 1? What are the t statistics for the number of tests and the intercept term?

What do these statistics tell you about the choice of number of tests as the independent variable and the probability that there are fixed costs?

**Transcribed Image Text:**

## Month Radiology Tests 2,800 2,600 3,100 3,500 3,400 3,700 3,840 4,100 3,450 Total Cost January February March April May S133,500 135,060 175,000 170,600 176,900 186,600 174,450 95.510 185,300 ine Jul August September

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## 1 Regression output from spreadsheet SUMMARY OUTPUT Regression Statistics Multiple R 0 87621504 R …View the full answer

**Related Book For**

## Cornerstones of Cost Management

**ISBN:** 978-1285751788

3rd edition

**Authors:** Don R. Hansen, Maryanne M. Mowen

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