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 | $ | 136,301 | 1,000 | |||
August | 96,613 | 721 | ||||
September | 246,580 | 1,998 | ||||
October | 244,394 | 1,606 | ||||
November | 293,263 | 1,915 | ||||
December | 226,449 | 1,718 | ||||
January | 268,137 | 1,945 | ||||
February | 301,000 | 1,979 | ||||
March | 272,462 | 1,670 | ||||
April | 261,925 | 1,729 | ||||
May | 326,978 | 1,966 | ||||
June | 254,418 | 1,026 | ||||
July | 219,167 | 921 | ||||
Total | $ | 3,147,687 | 20,194 | |||
Average | $ | 242,130 | 1,553 | |||
The controller's office has analyzed the data and has given you the results from the regression analysis:
SUMMARY OUTPUT | |
Regression Statistics | |
Multiple R | 0.7985572 |
R Square | 0.637693600 |
Adjusted R Square | 0.604756654 |
Standard Error | 40,005.80589 |
Observations | 13 |
ANOVA | |||||
df | SS | MS | F | Significance F | |
Regression | 1 | 30,986,661,233 | 30,986,661,233 | -19.3610424 | 0.00106299 |
Residual | 11 | 17,605,109,557 | 1,600,464,505.0 | ||
Total | 12 | 48,591,770,790 |
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | |
Intercept | 72,045.32692 | 40,215.47137 | 1.79148284 | 0.10073652 | -16,468.32876 | 160,558.9826 | -16,468.32876 | 160,558.9826 |
X Variable 1 | 109.4928073 | 24.88405898 | 4.400118459 | 0.00106299 | 54.72336273 | 164.262252 | 54.72336273 | 164.262252 |
The correlation coefficient (rounded to the 3rd decimal) for the regression equation for administrative costs is:
-
0.735.
-
0.723.
-
0.799.
-
0.833.
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