Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Item	Simple regressiom (units)	Simple regression (machine hours)	Multiple regression (both variables)
Intercept	$3,000	$2,600	$3,200
R2	0.89	0.67	0.92
Coefficient/slope	$2.50	$1.82	$1.80 (units)
			$4.90 (machine hours)

State the best cost estimation model to estimate FOH costs?

Question 15 options:

	Y = $3,000 + 0.89 (# of units)
	Y = $2,600 + 1.82 (# of m/c hours)
	Y = $3,200 + 1.80 (# of units) + 4.90 (# of m/c hours)
	Y = $3,200 + 2.5 (# of units) + 1.82 (# of m/c hours)

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Question 16 (2.5 points)

Use the following information to answer questions 15 17

Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Item	Simple regressiom (units)	Simple regression (machine hours)	Multiple regression (both variables)
Intercept	$3,000	$2,600	$3,200
R2	0.89	0.67	0.92
Coefficient/slope	$2.50	$1.82	$1.80 (units)
			$4.90 (machine hours)

Using the best cost estimation model determine the estimated FOH costs if Photon expects to produce 300 units and use 50 m/c hours?

Question 16 options:

	$3,750
	$3,985
	$2,691
	$4,760

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Question 17 (2.5 points)

Use the following information to answer questions 15 17

Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Item	Simple regressiom (units)	Simple regression (machine hours)	Multiple regression (both variables)
Intercept	$3,000	$2,600	$3,200
R2	0.89	0.67	0.92
Coefficient/slope	$2.50	$1.82	$1.80 (units)
			$4.90 (machine hours)

Which of the following statements is false (with respect to the best model)?

Question 17 options:

	92% of the variation in FOH costs can be explained by changes in the # of units produced and the # of m/c hours used
	FOH costs are estimated to increase by $1.80 for every additional unit produced
	The estimated amount of fixed FOH costs is $3,985
	FOH costs are estimated to increase by $4.90 for every additional m/c hour used