Assume that the following relationship holds:

Month	Machine Hours (hrs.)	Maintenance Costs ($)
1	1,330	102,694
2	1,400	103,694
3	1,500	108,694
4	1,470	108,694
5	1,620	116,694
6	1,690	115,694
7	1,490	107,694
8	1,310	102,694
9	1,450	106,694
10	1,580	113,694
11	1,300	100,694
12	1,600	113,694
13	1,650	114,694
14	1,440	109,694
15	1,340	102,694
16	1,670	114,694
17	1,480	106,694
18	1,360	103,694
19	1,340	103,694
20	1,540	112,694

Maintenance Costs = (v * Machine Hours) + f

REQUIRED:

Estimate the values of v and f and the cost equation, using,

1. the High-Low Method, and

2. the Linear Regression method.

Note, to use the linear regression method, you MUST use the Microsoft Excel program. Please follow the instructions on P.329 of the textbook; DIRECTIONS FOR ADD-Ins: Data Analysis Toolpak.

Make sure to report

1. the values of v and f;

2. a scatter plot of the data points, and

3. the adjusted R-square; explain what the adjusted R-square means.

4. The cost equation in the form of Y = vx + f, substituting the values for v and f from the regression output

YOUR SUBMISSION MUST BE IN EXCEL. ONE WORKBOOK, WITH A WORKSHEET FOR EACH ANALYSIS (i.e., High-Low Method and Regression Analysis respectively). The regression analysis must include the output from the Analysis Datapak similar to Exhibit 6-15 on page 328.

Answer rating: 100% (QA)

Dependent variable is maintenance costs and independent variable is machi... View the full answer