An important product is the cost sampled for significant components and over the years a product index
Question:
An important product is the cost sampled for significant components and over the years a product index is faithfully calculated. The following is the table of indexes.
Year | Product Index x, y |
0 | 95.1 |
1 | 97.7 |
2 | 98.4 |
3 | 100 |
4 | 100.1 |
5 | 102.2 |
6 | 103.5 |
7 | 104.9 |
8 | 106.6 |
9 | 109.7 |
a) Determine the values of parameters a and b of the linear regression equation using the least-squares method.
b) Find the 90% prediction interval for the year 10 value. Estimate the 95% confidence interval for the slope.
c) The product cost for year 9 is $17,500 per unit. Find the expected cost and the 90% upper and lower values of the cost for year 10.
d) Determine the coefficient of correlation, r. What can you say about the strength of the prediction of the cost range
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young