Jefferson County Airport handles several daily commuter flights and many private flights. The county budget officer has compiled the following data regarding airport costs and activity over the past year.

Required:
1. Draw a scatter diagram of the airport costs shown above.
2. Compute the least-squares regression estimates of the variable- and fixed-cost components in the airport's cost behavior pattern. Use the formulas given in the appendix to the chapter. (Use the data as they are presented in the problem: flights measured in hundreds and costs measured in thousands of dollars. Be careful how you interpret the results.)

3. Write the least-squares regression equation for the airport's costs.
4. Predict the airport's costs during a month when 1 ,500 flights originate at the airport.
5. Compute the coefficient of determination (R2) for the regression equation. Briefly interpret R2.

Transcribed Image Text:

$20 19 18 19 17 20 Month January February. March April. May June Airport Costs (in thousands) Flights Originating at Jefferson County Airport (in hundreds) 12 10 9 14 8 11 July 21 15 August 17 9 September 21 12 October 19 10 November 24 14 December 18 11