Question: ABC Co is trying to estimate the cost function for maintenance costs in their production department. They believe that it's affected by the amount of
ABC Co is trying to estimate the cost function for maintenance costs in their production department. They believe that it's affected by the amount of machine time used, the amount of direct labor used, and the pounds of direct materials used. They've provided the following observations for the past 17 months: Maintenance costs ($) Direct labor hours Machine hours Pounds of DM 5,656 7,600 2,371 13,699 4,195 6,262 1,804 10,308 6,176 8,034 2,223 14,333 5,581 6,864 1,901 12,012 4,919 7,176 2,153 11,954 4,677 6,208 2,016 11,424 4,477 6,262 1,823 10,308 5,182 8,112 2,223 14,196 5,430 7,592 2,168 12,520 6,888 7,821 2,252 13,825 6,192 7,800 2,138 12,469 5,496 8,320 2,352 14,140 5,048 6,555 2,029 12,075 5,949 6,499 1,990 11,608 5,394 6,840 2,160 12,096 4,603 6,566 2,030 12,311 5,626 6,732 2,039 11,666 Use the regression feature in Microsoft Excel to try to find the relationship between maintenance costs and the three suspected cost drivers. i. First, regress the maintenance costs on all three variables at the same time, and do not force the intercept to equal zero (i.e., do not check the "constant is zero" box). What percentage of the variability of the maintenance costs is explained by the regression? Are
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