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Regression Analysis: Calculation of Total Cost Terrific Taffy is a manufacturer of saltwater taffy. Recently, the owner, Melinda Gross, asked her controller to perform a
Regression Analysis: Calculation of Total Cost
Terrific Taffy is a manufacturer of saltwater taffy. Recently, the owner, Melinda Gross, asked her controller to perform a regression analysis on production costs. Melinda believes that pounds of taffy produced drive all of the company's production costs. The controller generated the following regression output:
| R Square | 0.50688 | |||||||||||
| Standard Error | 1.43764 | |||||||||||
| Analysis of Variance | ||||||||||||
| DF | Sum of Squares | Mean Square | ||||||||||
| Regression | 1 | 418.52992 | 481.52992 | |||||||||
| Residual | 197 | 407.16375 | 2.06682 | |||||||||
| F = 202.49935 | Signif.F = 0.0000 | |||||||||||
| Variables in the Equation | ||||||||||||
| Variable | Coefficients | Standard Error | t Stat | P-Value | ||||||||
| Pounds | 7.940 | 0.055794 | 14.230 | 0.0000 | ||||||||
| Intercept | 205.070 | 0.261513 | 20.780 | 0.4361 | ||||||||
Required:
Calculate an estimated total cost, assuming that Terrific Taffy manufactures 7,500 pounds of taffy. Round to the nearest whole dollar. $
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