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Louis Katz, a cost accountant at Papalote Plastics, Inc. (PPI), is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI.

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Louis Katz, a cost accountant at Papalote Plastics, Inc. (PPI), is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI. Louis's independent variable is production lot size (in 1,000's of units), and his dependent variable is the total cost of the lot (in $100's). Regression analysis of the data yielded the following tables. Standard Error t Statistic p-value Coefficients Intercept 3.996 1.161268 3.441065 0.004885 X 0.358 0.102397 3.496205 0.004413 Source df SS MS F Regression 1 9.858769 9.858769 12.22345 Se = 0.898 r=0.526341 Residual 11 8.872 0.806545 Total 12 18.73077 Using a = 0.05, Louis should 1 increase the sample size not reject Ho: = 0 not reject Ho: Po O O suspend judgment O reject Ho: B = 0

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