MC Qu. 35 Midgett Co. has accumulated data to use in ... Midgett Co. has accumul

Question

MC Qu. 35 Midgett Co. has accumulated data to use in ... Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows: Month Machine Hours 620 520 390 July Aug. Sept. Oct Nov. Maintenance Cost $5,040 3,648 4,320 3,331 5,221 3,550 3,655 5,365 5,110 4,866 3,944 3.790 $51,840 $4,320.00 640 610 _ Dec, Sum _ 6,270 Average Average cost per hour ($51,840 - 6,270) = $8.27 (rounded to the nearest cent) r= 99821 r2 = 99780 8:46 AM 4/5/2018 The percent of the total variance that can be explained by the regression equation is: O e R. 39 Type here to search

Explanation / Answer

R2 is coefficient of determination. In regression analysis, it measures the percentage of variability explained by the regression in total variability. So your desired answer is simple the value of R2 i.e. 0.99780 or 99.78%.

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