The Cost Department of Kemp Supply Company attempts to establish a budget to assist in the control of marketing expenses. An examination of individual expenses shows:

Statistical analysis is needed to split the travel expense satisfactorily into its fixed and variable portions. Before such an analysis is begun, it is thought that the variable portion of the travel expense might vary in accordance either with the number of calls made on customers each month or the value of orders received each month. Records reveal the following details over the past twelve months:

Required:
(1) Compute the coefficient of correlation, r, and coefficient of determination, r2, between (a) the travel expense and the number of calls made and (b) the travel expense and orders received. Round to four decimal places.
(2) Compare the answers obtained in requirements la and 1 b.

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Fixed Portion Variable Portion Item Sales staff: $1,200 2,000 Salaries .. Retainers. Commissions.... Advertising none none 4% of sales none none 0 5,000 Travel Expense $3,000 3,200 2,800 3,400 3,100 3,200 2,900 3,300 3,500 3,400 3,200 3,400 Calls Made Orders Received $53,000 65,000 48,000 73,000 62,000 67.000 60,000 76,000 82,000 62,000 64,000 80,000 Month 5 January.. February March .. April.. May. June July August 410 420 380 460 430 450 390 470 480 490 440 460 October. November December...