Question: Dana Corp. uses linear regression to estimate costs. The machine hours and related costs for the last year, as well as the regression analysis results,

Dana Corp. uses linear regression to estimate costs. The machine hours and related costs for the last year, as well as the regression analysis results, are as follows:

Month Maintenance Cost Machine Hours
Jan. $ 4,450 580
Feb. 3,250 420
Mar. 3,850 500
Apr. 3,070 400
May 4,600 600
June 3,210 410
July 3,280 420
Aug. 4,720 620
Sept. 4,510 590
Oct. 4,300 570
Nov. 3,550 450
Dec. 3,410 440
Sum $ 46,200 6,000
Average $ 3,850 $ 500
Average cost per hour $ 8.00
a (intercept) $ 205.82
b (coefficient) 7.2884
Standard error of the estimate 34.469
R-squared 0.99724
t-value for b 60.1050

If machine hours are 400, Aaron's manager can be approximately two-thirds confident that the range of the maintenance costs will be

Multiple Choice

  • $3,060.72 to $3,181.61.

  • $3,059.74 to $3,182.62.

  • $3,086.71 to $3,155.65.

  • $3,095.43 to $3,147.05.

  • None of these answer choices are correct.

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