The manager of the main laboratory facility at Elmhurst Health Center (from E6-32A) collects seven additional months of data after obtaining the regression results in E6-34A.

The number of tests performed and the total monthly overhead costs for the lab follow:

Use Excel to do the following:

Requirements:

1. Run a regression analysis using data for August through February.
2. Determine the lab’s cost equation (use the output from the regression analysis you performed using Excel).
3. Determine the R-squared using the Excel output you obtain. What does the lab’s R-squared indicate?
4. Predict the lab’s total overhead costs for the month if 3,500 tests are performed.

Data From E6-34A and E6-32A:-

Using the data provided in E6-32A, the laboratory manager performed a regression analysis to predict total laboratory overhead costs. The output generated by Excel is as follows:

Data From E6-32A:-

The manager of the main laboratory facility at Elmhurst Health Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed.
The lab manager collected the following data for the first seven months of the year:

Transcribed Image Text:

Month August. Number of Lab Tests Performed 3,350 Total Laboratory Overhead Costs $23,500 September... 3,700 $27,550 October....... 3,650 $24,500 November. 3,450 $26,400 December... 4,200 $28,500 January 2,500 $22,800 February 3,800 $25,350