Betty Yeager has been operating a dental practice for the past five years. As part of her practice, she provides a dental hygiene service. She has found that her costs for this service increase with patient load. Costs for this service over the past eight months are as follows:

Required:
1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of patients for the horizontal. Based on an examination of the scatter- graph, does there appear to be a linear relationship between the cost of dental hygiene services and patients served? 2. Compute the cost formula for dental hygiene services using the high-low method. Calculate the predicted cost of dental hygiene services for January for 450 patients using the formula found in Requirement 1.

3. Compute the cost formula for dental hygiene services using the method of least squares. Using the regression cost formula, what is the predicted cost of dental hygiene services for January for 450 patients? What does the coefficient of determination tell you about the cost formula computed by regression?
4. Which cost formula—the one computed using the high-low method or the one using the least squares coefficients—do you think is better? Explain.lop5

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Month Patients Served Total Cost May June 320 $2,000 480 2,500 July 600 3,000 August 200 1,900 September 720 4,500 October 560 2,900 November 630 3,400 December 300 2,200