The Business School at Eastem College is collecting data as a first step in the preparation of next year's budget. One cost that is being looked at closely is administrative staff as a function of student credit hours. Data on administrative costs and credit hours for the most recent 13 months follow: Month July August September October November December January February March April May June July Total Average Administrative Costs $ 543,064 346,975 960,036 908,855 1,084,705 774,686 920,375 1,029,000 880,496 806,085 1.049,908 715,756 538,301 $ 10,558,242 $ B12, 172 Credit Hours 525 242 2.923 2,100 2,749 2.335 2,812 2.883 2,234 2.358 2.856 882 662 25,561 1.966 The controller's office has analyzed the data and given you the results from the regression analysis: SUMMARY OUTPUT Regression Statistics Multiple R R 0.93338922 R Square 0.871215436 Adjusted R Square 0.859507749 Standard Error 838 10.54742 Observations 13 ANOVA F 74.4139633 df 1 11 12 Regression Residual Total SS 5.22699E+11 77266286442 5.99965E+11 MS 5.227E+11 7024207858 Significance F 3.16774E-06 Intercept Credit Hours Coefficients 404874.531 207.1465552 Standard Error 52627.28522 24.0132254 T Stat 7.69324371 8.62635284 D-value 9.4548E-06 3.1677E-08 Lower 95% 289042.6573 154.2938025 Upper 95% 520706.4047 259.9993079 Required: a. In the standard regression equation y = a + bx, the letter b is best described as the Independent variable Dependent variable. Constant coefficient. Correlation coefficient Variable cost coefficient. b. In the standard regression equation y = a + bx, the letter y is best described as the: Independent variable Correlation coefficient. Constant coefficient, Variable cost coefficient. Dependent variable. c. In the standard regression equation y = a + bx, the letter x is bost described as the Independent variable Dependent variable. Constant coefficient Correlation coefficient Variable cost coefficient, d. If the controller uses the high-low method to estimate costs, the cost equation for administrative costs is (numbers are rounded to the nearest dollar): (Do not round intermediate calculations.) Cost = $291,637 +($229 x Credit hours). Cost = $233,571 + ($101 x Credit hours). Cost = $229.50 x Credit hours, Cost = $404,874. Some other equation. e. Based on the results of the controller's regression analysis, the estimate of administrative costs in a month with 2,100 credit hours would be: (Round intermediate calculations to nearest whole dollar value.) $834,993 $844,200 S404,917 S839,575 Some other amount. f. The correlation coefficient (rounded) for the regression equation for administrative costs is: 0.871 0.933 0.859 0.953 Some other amount. g. The percent of the total variance (rounded) that can be explained by the regression is: 85.9 87.1 93. 96.6 Some other amount
