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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 3,100 3,500 2,500 3,700 4,400 3,900 4,700 4,100 2,600 4,300 5,800 5,400 Electricity Costs $18,700 $21,600 $13,800 $23,600 $28,550 $22,600 $25,050 $23,050 $16,100 $26,600 $31,600 $28,050 Summary Output Regression Statistics Multiple R 0.947 R Square 0.897 Adjusted R2 0.887 Standard Error 1,753.98 Observations 12.00 Coefficients 3,776.77 4.87 Intercept Machine Hours Standard Error 2,145.85 0.52 t Stat 1.76 9.35 P-value 0.11 Lower 95% (1,004.49) 3.71 Upper 95% 8,558.03 6.04 0.00 Based on the results of the regression analysis, the estimate of electricity costs in a month with 2,800 machine hours would be: (rounded to the nearest whole dollar) Multiple Choice $3,777. $17,426. $15,635. $21,359
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