An advertising agency wanted to determine the relationship between its monthly operating costs and a potential cost driver, professional hours. The output of a regression analysis performed using Excel showed the following information:

a. Given this output, write the advertising agency's monthly cost equation.
b. Should management use this equation to predict monthly operating costs? Explain your answer.

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1 SUMMARY OUTPUT Regression Statistics 4 Multiple R 5 R Square 6 Adjusted R Square 7 Standard Error 0.85 0.72 0.66 207.23 12 10 ANOVA df MS F Significance F 0.02 12 Regression 13 Residual 14 Total 15 545,878.49 545,878.49 12.71 214,721.51 10 42,944.3 760,600 Lower UpperLower Upper 95.0% Coefficients Standard Error 1,217.79 0.08 t StatP-value 47.19 0.02 95% 2,183.23 4,077.64-2,183.234,077.64 16 95% 95.0% 947.2 0.78 18 X Variable 1 0.27 3.57 0.02 0.08 0.02 0.08