Question: The Business School at Eastern College is accumulating data as a first step in the preparation of next year's budget development. One cost that is
The Business School at Eastern College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked at closely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the most recent academic year is shown below:
Administrative Credit
Month: Costs: Hours:
July $129,301 250
August 82,613 115
September 228,580 1,392
October 216,394 1,000
November 258,263 1,309
December 184,449 1,112
January 219,137 1,339
February 245,000 1,373
March 209,642 1,064
April 191,925 1,123
May 249,978 1,360
June 170,418 420
July 128,167 315
Total $2,385,700 11,857
Average $198,808 988
The controller's office has analyzed the data and has given you the results from the regression analysis:
SUMMARY OUTPUT:
Regression Statistics:
Multiple R 0.93346722
R Square 0.87136104
Adjusted R Square 0.85966659
Standard Error 19943.5805
Observations 13
ANOVA:
Regression Residual Total
df 1 11 12
SS 29636340628 4375210454 34011551082
MS 2.96363E=10 397746405
F 74.5106436
Significance F 3.14788E-06
Intercept Credit Hours
Coefficients $96,409.42 $103.56
Standard Error 12521.26261 11.9974027
t-Stat 7.69965611 8.6319548
P-value 9.381E-06 3.1479E-06
Lower 95% 68850.28899 77.15491912
Upper 95% 123968.543 129.967156
Lower 95.0% 68850.289 77.1549191
Upper 95.0% 123968.543 129.967156
- How does the administrative cost function use the high and low method?
- Using the highest and lowest point method, what is the total administrative cost if there are 1000 credit hours?
- How is the administrative cost function using the regression method?
- Using the regression method, if there are 1000 credit hours, what is the total administrative cost?
- Based on the regression output above, the coefficient of determination = 87.14%. Explain the meaning!
- The conclusion is how the behavior of administrative boarding houses? Does it behave fixed, variable or mixed?
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