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Item 30

Item 30

Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:

Month	Machine Hours	Electricity Costs
January	2,300	$	19,100
February	2,700	$	22,400
March	1,700	$	14,200
April	2,900	$	24,400
May	3,600	$	28,950
June	3,100	$	23,400
July	3,900	$	25,450
August	3,300	$	23,450
September	1,800	$	16,900
October	3,500	$	27,400
November	4,500	$	32,400
December	4,000	$	28,450

Summary Output
Regression Statistics
Multiple R	0.957
R Square	0.917
Adjusted R2	0.908
Standard Error	1,586.26
Observations	12.00

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	5,970.52	1,766.77	3.38	0.01	2,033.90	9,907.13
Machine Hours	5.76	0.55	10.49	0.00	4.54	6.98

The correlation coefficient for the regression equation for electricity costs is:

Multiple Choice

• 0.957.

• 0.917.

• 0.908.

• 0.967.