M$3-$Ch$.8$ Excel Activity $7-$ Regression Equations, Predictions, and Coefficient of Determination with XLMiner Analysis ToolPak

Question $1\frac{0}{10}$

Submit

An important application of regression analysis in accounting is in the estimation of cost$.$ By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume.

In the Microsoft Excel Online file below you will find a sample of production volumes and total cost data for a manufacturing operation. Conduct a regression analysis to explore the relationship between total cost and production volume and then answer the questions that follow.

Due to a recent change by Microsoft you will need to open the XLMiner Analysis ToolPak add$-$in manually from the home ribbon. Screenshot of ToolPak

Open spreadsheet

a$.$ Compute $b_1$ and $b_0($to $1$ decimal$).$

$b_1$

$b_0$

Complete the estimated regression equation $($to $1$ decimal$).$

hat$(y)=,+,x$

b$.$ According to this model, what is the change in cost $($in dollars$)$ for every unit produced $($to $1$ decimal$)?$

c$.$ Compute the coefficient of determination $($to $3$ decimals$).$ Note: report $r^2$ between $0$ and $1.$

$r^2=$

What percentage of the variation in total cost can be explained by the production volume $($to $1$ decimal$)?$

$\%$