Regression Analysis

Mercer Company used least squares regression analysis to obtain the following output:

Payroll Department Cost (Y)

Explained by Number of Employees (X)

Constant $5,800

Standard error of Y estimate 630

r2 0.8924

Number of observations 20

X coefficient(s) 1.902

Standard error of coefficient(s) 0.0966

a. What is the total fixed cost?

b. What is the variable cost per employee?

c. What is the cost equation?

d. What is the coefficient of determination? Is this a good equation?