The following data were collected for 12 months using a company's sales reports. The report shows, for each month, the amount of money the company spent for advertising (x) and the amount of sales (y) made after those advertising expenditures. Both the advertising and sales dollars are in units of thousand dollars. The Chief Executive Officer of the company is interested in the impact of the advertising spending on the actual sales.
Month x y
1 90 9,200
2 116 9,850
3 138 12,640
4 150 14,100
5 166 14,620
6 164 13,800
7 156 13,180
8 130 12,280
9 108 9,280
10 102 9,760
11 68 6,850
12 84 8,720
(a) Provide the scatter plot for advertising vs sales dollars with the trend line. (4 points)
(b) Obtain a linear regression line for the data. (Hint: You need to calculate a and b to get the linear
regression equation: y= a + bx) (12 points) You need to show all the work in Excel or manually
when you computed the line equation.
(c) Predict the sales figures in months 13 and 14 if the advertising budgets allocated for months 13
and 14 are $135,000 and $128,000, respectively. (4 points)