OLS linear regression (continuation of Exercise 10-16). Using Excel, plot the actual values of the predictor variable Y (in $ millions) from Exercise 10-16 as a bar chart and add a trendline.

REQUIRED 1. What does this step of the specification analysis tell a management accountant?

2. How would a management accountant interpret this new information? What is the next step?

3 Below is the plot of the residuals. How would a management accountant interpret this new information?LO1

Transcribed Image Text:

Residuals 300 200- 100- -100 -200 Quantity Sold and Produced Residual Plot 0 200 400 600 800 Quantity Sold and Produced, X (in thousands)