The Business School at Eastern College is accumulating data as a first step in t

Question

The Business School at Eastern 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: Administrative Credit Month Costs Hours July $ 129,579 345 August 83,026 390 September 224,986 1,401 October 217,147 1,131 November 257,958 1,340 December 184,283 1,367 January 218,804 1,369 February 245,617 1,538 March 209,995 1,130 April 192,071 1,120 May 249,778 1,380 June 170,882 651 July 127,616 354 Total $ 2,511,742 13,516 Average 193,211 1,040 The controller's office has analyzed the data and has given you the results from the regression analysis: Regression Statistics Multiple R 0.9053404 R Square 0.819641231 Adjusted R Square 0.803244979 Standard Error 23,516.82963 Observations 13 Anova df SS MS F Significance F Regression 1 27,646,284,023 27,646,284,023 49.9895491 2.07121E-05 Residual 11 6,083,454,036 553,041,276.0 Total 12 33,729,738,059 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper Intercept 80,425.64253 17,233.83922 4.66672814 0.000686177 42,494.21818 118,357.0669 42,494.21818 118,357.0669 X Variable 1 108.4794797 15.34291869 7.070328783 2.07121E-05 74.70994333 142.249016 74.70994333 142.249016 Based on the results of the high-low analysis, the estimate of administrative costs in a month with 1,000 credit hours would be: (rounded to the nearest whole dollar)

Explanation / Answer

here regression equation is given from the given information

y(cost)=intercept+Xvariable1=80425.6425+108.4794*hours

for hours=1000, the y=80425.6425+108.4794*1000=188905

required answer of administrative costs is 188905

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