10-42 Regression choosing among models, Apollo Hospital Settent surgeries tively minor procedures. Apollo is a nonprofit institution and places son con plies. To better understand the behavior of this cost. Jube consults with Brant, the persone Apollo's CFO, Julie Chen, has been concerned ofte about the hospitals Consumption for Apollo's cost system. After some discussion Jule and Rhett conclude that there are NO drivers for the hospitais medical supplies. The first driver is the total number of procedures The second is the number of patient-hours generated by Apollo Julie and Rhett View the latest tally better cost driver because the hospital does perform a variety of procedures, some more con order to provide services to the community in an efficient manner others. Rhett provides the following data relating to the past year to Julie 1 2 mo Home Insert Page Layout Formulas Data A B D Month Medical supplies costs Number of procedures Number of patient-hours 1 $108,000 2.000 2 230,000 500 3,900 3 84,000 240 1,900 4 238,000 520 4.100 5 193,000 240 3.400 6 180,000 340 3,700 7 210,000 420 3,100 8 92,000 360 1.200 9 222,000 320 3,000 10 78,000 180 1,300 11 127.000 440 2,800 12 225,000 380 3,800 8 9 10 11 12 13 Required 1. Estimate the regression equation for (al medical supplies costs and number of procedures and medical supplies costs and number of patient-hours. You should obtain the following results: Regression - Medical supplies costs = a + b x Number of procedures) Variable Coefficient Standard Error -Value Constant $36.969.77 $56,404.86 0.65 Independent variable: No. of procedures $ 351.91 $ 152.93 2.37 P = 0.36, Durbin-Watson statistic = 2.48 Regression 2 Medical supplies costs = 3 + bx Number of patient-hours) Variable Coefficient Standard Error Constant $3.654.86 $23,569 51 Independent variable: No. of patient-hours $ 56.76 S 7.82 p=0.84, Durbin-Watson statistic 1.91 -Value 0.16 7.25 2. On different graphs plot the data and the regression lines for each of the following cost functions: Medical supplies costs + b x Number of procedures) 1. Medical supplies costs = 3 + lb x Number of patient-hours) 1. Evaluate the regression models for "Number of procedures" and "Number of patient-hours" as the cost driver according to the format of Exhibit 10-18 (page 406) 4. Based on your analysis, which cost driver should Julie Chen adopt for Apollo Hospital? Explain your