Question
The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that
The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked at closely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the past thirteen months are shown below:
Month | Administrative Costs | Credit Hours | ||||
July | $ | 129,301 | 250 | |||
August | 82,613 | 115 | ||||
September | 225,580 | 1,392 | ||||
October | 216,394 | 1,000 | ||||
November | 258,263 | 1,309 | ||||
December | 184,449 | 1,112 | ||||
January | 219,137 | 1,339 | ||||
February | 245,000 | 1,373 | ||||
March | 209,462 | 1,064 | ||||
April | 191,925 | 1,123 | ||||
May | 249,978 | 1,360 | ||||
June | 170,418 | 420 | ||||
July | 128,167 | 315 | ||||
Total | $ | 2,510,687 | 12,172 | |||
Average | $ | 193,130 | 936 | |||
The controller's office has analyzed the data and has given you the results from the regression analysis:
SUMMARY OUTPUT | |
Regression Statistics | |
Multiple R | 0.9317157 |
R Square | 0.868094147 |
Adjusted R Square | 0.856102705 |
Standard Error | 20,134.92395 |
Observations | 13 |
ANOVA | |||||
df | SS | MS | F | Significance F | |
Regression | 1 | 29,349,143,514 | 29,349,143,514 | 72.3928117 | 3.61909E-06 |
Residual | 11 | 4,459,566,787 | 405,415,162.4 | ||
Total | 12 | 33,808,710,301 |
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | |
Intercept | 96,647.02398 | 12,641.66539 | 7.64511803 | 1.00291E-05 | 68,822.90608 | 124,471.1419 | 68,822.90608 | 124,471.1419 |
X Variable 1 | 103.0607697 | 12.11283103 | 8.508396541 | 3.61909E-06 | 76.40060833 | 129.720931 | 76.40060833 | 129.720931 |
If the controller uses the high-low method to estimate costs, the fixed cost portion of the cost equation for administrative salaries is:
$198,808.
$69,731.68.
$96,409.42.
$19,943.58
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