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Problem 2. The following excel printout provides information to estimate overhead costs using linear regression: Coefficients Standard Error t Stat P-value Lower 95% Upper
Problem 2. The following excel printout provides information to estimate overhead costs using linear regression: Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 6035.987027 1411.05464 4.277642 0.002696 2782.0871 9289.88697 DLH 4.558482698 1.609683731 2.831912 0.022085 0.846543 8.27042244 # setups 771.1028938 54.93418317 14.03685 # moves 29.9411124 2.874675342 10.41548 6.44E-07 6.26E-06 644.42436 897.781429 23.312095 36.5701299 Regression Statistics Multiple R 0.996584412 R Square 0.99318049 Adjusted R Square 0.990623174 347.9563597 12 Standard Error Observations Required: (a). Write the complete cost function (round to nearest cent) using the appropriate variables. What's the estimated fixed cost? What's the estimated variable cost per unit? (b). What is the overhead estimate if the department has 1,205 DLH, 55 setups and 125 moves? (4 points) (c). Calculate a 99 percent confidence internal for the prediction made in requirement (b). (4 points)
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