Question
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 | Machine Hours | Electricity Costs | ||
| January | 3,000 | $ | 18,650 | |
| February | 3,400 | $ | 21,500 | |
| March | 2,400 | $ | 13,750 | |
| April | 3,600 | $ | 23,500 | |
| May | 4,300 | $ | 28,500 | |
| June | 3,800 | $ | 22,500 | |
| July | 4,600 | $ | 25,000 | |
| August | 4,000 | $ | 23,000 | |
| September | 2,500 | $ | 16,000 | |
| October | 4,200 | $ | 26,500 | |
| November | 5,600 | $ | 31,500 | |
| December | 5,200 | $ | 28,000 | |
| Summary Output | |
| Regression Statistics | |
| Multiple R | 0.952 |
| R Square | 0.906 |
| Adjusted R2 | 0.897 |
| Standard Error | 1,676.51 |
| Observations | 12.00 |
| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | |
| Intercept | 3,639.33 | 2,048.60 | 1.78 | 0.11 | (925.25) | 8,203.90 |
| Machine Hours | 5.04 | 0.51 | 9.83 | 0.00 | 3.89 | 6.18 |
The correlation coefficient for the regression equation for electricity costs is:
Multiple Choice
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0.897.
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0.952.
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0.906.
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0.956.
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0073527062
