Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been
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Question:
Month | Machine Hours | Electricity Costs | ||
January | 3,400 | $ | 18,850 | |
February | 3,800 | $ | 21,900 | |
March | 2,800 | $ | 13,950 | |
April | 4,000 | $ | 23,900 | |
May | 4,700 | $ | 28,700 | |
June | 4,200 | $ | 22,900 | |
July | 5,300 | $ | 25,200 | |
August | 4,400 | $ | 23,200 | |
September | 2,900 | $ | 16,400 | |
October | 4,600 | $ | 26,900 | |
November | 6,500 | $ | 31,900 | |
December | 5,800 | $ | 28,200 | |
Summary Output | |
Regression Statistics | |
Multiple R | .928 |
R Square | .862 |
Adjusted R2 | .848 |
Standard Error | 2,039.35 |
Observations | 12.00 |
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | |
Intercept | 4,492.22 | 2,479.75 | 1.81 | 0.10 | (1,033.00) | 10,017.44 |
Machine Hours | 4.35 | 0.55 | 7.89 | 0.00 | 3.12 | 5.58 |
If the controller uses regression analysis to estimate costs, the cost equation for electricity cost is:
Cost = $4,492.22 + $2,479.75 × Machine-hours.
Cost = $2,479.75 + $0.55 × Machine-hours.
Cost = $4,492.22 + $4.35 × Machine-hours.
Cost = $2,039.35 + $12.00 × Machine-hours.
Related Book For
Business Statistics A First Course
ISBN: 9780321979018
7th Edition
Authors: David M. Levine, Kathryn A. Szabat, David F. Stephan
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