Accountants at the Tucson firm, Larry Youdelman, CPAs, believed that several traveling executives were submitting unusually high travel vouchers when they returned from business trips. First, they took a sample of 200 vouchers submitted from the past year. Then they developed the following multiple regression equation relating expected travel cost to number of days on the road (x1) and distance traveled (x2) in miles:

yn = +90.00 + +48.50x1 + +.40x2 The coefficient of correlation computed was .68.

a) If Barbara Downey returns from a 300-mile trip that took her out of town for 5 days, what is the expected amount she should claim as expenses?

b) Downey submitted a reimbursement request for $685. What should the accountant do?

c) Should any other variables be included? Which ones? Why? LOP1