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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 2,500 2,900 1,900 3,100 3,800 3,300 4,100 3,500 2,000 3,700 4,700 4,200 Electricity Costs $ 18,400 $ 21,000 $ 13,500 $ 23,000 $ 28,250 $ 22,000 $ 24,750 $ 22,750 $ 15,500 $ 26,000 $ 31,000 $ 27,750 Summary Output Regression Statistics Multiple R R Square Adjusted R2 Standard Error Observations .965 .932 925 1,425.18 12.00 I Intercept Machine Hours Coefficients 3,726.88 5.77 Standard Error 1,682.82 0.49 Stat 2.21 117 P-value 0.05 0.00 1 Lower 95% (22.69) 4.67 Upper 95% 7,476.45 6.87 Based on the results of the high-low analysis, the estimate of electricity costs in a month with 2,200 machine hours would be: $15,375. O $22,825. O $15,180 $16,427
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