Suenos Manufacturing company,using 12 months of data on purchasing cost and number of purchase orders, ran a regression equation that yielded the folowing information on the intercept, X variable 1, and standard error. )all regression results have been rounded to the nearest cent.

Intercept: 16,403.85

X variable 1: 11.69

Standard Error: 476.58

Suenos Manufacturing Company estimates that 430 purchase orders will be processed next month and wants to know the interval into which the actual value will fall with a 95 percent confidence level. ( A table of selected values of the t distribution is found in Exihibit 3-14, cornerstones of cost accounting)

**Exihibit 3-14

Table of selected values: t Distribution*

degrees of freedom 90% 95% 99%

1 6.314 12.708 63.657

2 2.920 4.303 9.925

3 2.353 3.182 5.841

4 2.132 2.776 4.604

5 2.015 2.571 4.032

6 1.943 2.447 3.707

7 1.895 2.365 3.499

8 1.860 2.306 3.355

9 1.833 2.262 3.250

10 1.812 2.228 3.169

11 1.796 2.201 3.106

12 1.782 2.179 3.055

13 1.771 2.160 3.055

14 1.761 2.145 3.012

15 1.753 2.131 2.947

16 1.746 2.120 2.921

17 1.740 2.110 2.898

18 1.734 2.101 2.878

19 1.729 2.093 2.861

20 1.725 2.086 2.845

30 1.697 2.042 2.750

00 1.645 1.960 2.576

*Values are based on the assumption that two tails are improtant - as tehy would be with confidence intervals and hypothesis test of regression coefficients. for values avobe 30, simply use teh las row.

Required:

1. Determine the appropriate t-statistic value from exihibit 3-14 for constructing Suenos Manufacturing Company's confidence interval.

2. Suenos manufacturing company estimates that next month will have 430 purchase orders. construct a 95% confidence interval around the predicted value for materials handling cost. ( round the confidence interval answers to the nearest dollar)

3.What if Suenos Manufacturing wanted a 90% confidence level? will the confidence interval be larger or smaller than the calculated in the requirement 2? construct a 90% interval ( round the confidence interval answers to the nearest dollar)