The production supervisor of Zeus Inc. would like to know the range of maintenance cost that should be expected about 90% of the time at the 1,500-machine-hour level of activity. The least squares estimate of maintenance cost at that level of activity is $500. The least squares parameters estimates-the estimates of fixed cost and the variable cost rate-were derived from a sample of data for a recent 15-month period. The machine hour average for the sample period is 1,300, and the machine hour deviations from its average squared and summed [∑(xi - )2] is 150,000. The prediction error squared [∑(yi -yi′)2] over me same sample period is $49,972.
Required
Compute the standard error of the estimate and the 90% confidence interval estimate for maintenance cost at the 1,500-machine-hour level of activity.