A hospital is analyzing its overhead costs.It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospital's overhead.The latest information on the hospital is as follows:

MonthHospitalNursingNo. ofOverheadOverhead Cost

OverheadHoursPatientCost PerPer Patient

CostsDaysNursing Hr.Day

July$950,00050,0007,900$19.00$120.25

August$1,070,00052,0008,900$20.58$120.22

September$825,00040,0008,700$20.63$94.83

October$922,50043,5006,900$21.21$133.70

November$1,150,00064,00011,900$17.97$96.64

December$890,00041,5006,750$21.45$131.85

The hospital ran a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The regression analysis produced the following data:

Intercept

346245

Slope

12.81796

RSQ

0.909311

Round the variable portion of the regression equation formula to two decimal places.Based on the regression equation formula, what will the predicted total hospital overhead costs be if 49,000 nursing hours are expended during a month?

The hospital then ran a regression analysis using number of patient days as cost driver. The regression analysis produced the following data:

Intercept

559764

Slope

47.970926

RSQ

0.563496482

Again, round the variable portion of the regression equation to two decimal places.If 8,500 patient days are predicted for a month, what is the total predicted hospital overhead costs using the regression equation?

Which regression equation, the one using nursing hours as the cost driver or the one using patient days as the cost driver, produces the most accurate correlation (best explanation of) the predicted hospital overhead costs. How do you know that your answer is correct?