Question 1. A sales manager collected the following data on x = years of experience and y = annual sales ($1,000s). The estimated regression equation for these data is

= 80 + 4x.

Salesperson	Years of Experience	Annual Sales ($1,000s)
1	1	80
2	3	97
3	4	97
4	4	102
5	6	103
6	8	101
7	10	119
8	10	118
9	11	127
10	13	136

(a)Compute SST, SSR, and SSE.SST=SSR=SSE=

(b)Compute the coefficient of determination r².(Round your answer to three decimal places.)

r²

= Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line. The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.

(c)What is the value of the sample correlation coefficient? (Round your answer to three decimal places.)

Question 2. 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. Consider the following sample of production volumes and total cost data for a manufacturing operation.

Production Volume (units)	Total Cost ($)
400	4,000
450	5,100
550	5,400
600	6,000
700	6,400
750	7,100

(a)Use these data to develop an estimated regression equation that could be used to predict the total cost for a given production volume. (Round your numerical values to two decimal places.)=

(b)What is the variable cost (in dollars) per unit produced?$

(c)Compute the coefficient of determination. (Round your answer to three decimal places.) What percentage of the variation in total cost can be explained by production volume? (Round your answer to one decimal place.) %

(d)The company's production schedule shows500units must be produced next month. Predict the total cost (in dollars) for this operation. (Round your answer to the nearest cent.)$