QUESTION TWO (15 MARKS)

The following data relates to the total costs incurred in Muigai Garage in a period of 8 weeks.

Week	Number of cars repaired	Total Costs incurred (Ksh.)
1	90	5,200,000
2	100	6,000,000
3	120	6,200,000
4	150	3,530,000
5	160	3,850,000
6	220	4,300,000
7	300	5,870,000
8	340	7,150,000

1. Use Excel to create a scatter plot.
2. Draw a line of best fit among the data points and identify outliers if any
3. Use Excel to add the regression equation and related R² statistic to the scatter plot.
4. Use the regression analysis feature in Excel to generate a complete regression output, and determine the "regression line"
5. Use Excel to draw in the "high-low" line, and visually confirm the line by calculating the high-low equation.
6. Visually inspect the scatter plot and comment on which line ("high-low" or "regression") is more representative of the data points.
7. Why do you think the two lines are different?
8. What does R² mean generally and what does its value specifically talk about the regression line developed from this data set.
9. As a manger would you be confident in using this cost equation to estimate costs at different activity levels?
10. Predict and compare cost estimates for week 9 when 390 cars are to be repaired.