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Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel.
Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month January February March April May June July August September October November December Machine Hours 2,300 2,700 1,700 2,900 3,600 3, 100 3,900 3,300 1,800 3,500 4,500 4,000 Electricity Costs $19, 100 $22,400 $14,200 $24,400 $28,950 $23,400 $25,450 $23,450 $ 16,900 $27,400 $32,400 $28,450 Summary Output Regression Statistics Multiple R 0.957 R Square 0.917 Adjusted R2 0.908 Standard Error 1,586.26 Observations 12.00 Intercept Machine Hours Coefficients Standard Errort Stat P-value Lower 95% Upper 95% 5,970.52 1,766.77 3.38 0.01 2,033.909,907.13 5.76 0.55 10.49 0.00 4.54 6 .98 If the controller uses regression analysis to estimate costs, the estimate of the fixed portion of electricity costs is: Multiple Choice Fixed Cost = $1,586.26. O Fixed Cost = $1,766.77. Fixed Cost = $5,970.52. o o Fixed Cost = $5.76
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