6. Kathryn\'s Moving Company prepares a regression analysis with the following r

Question

6. Kathryn's Moving Company prepares a regression analysis with the following results. A. What are the fixed costs and variable cost per mile based on the regression model output? Round the variable cost to the nearest cent (2 decimal places) and fixed cost to the nearest dollar (no decimals). Variable Cost Fixed Cost B. Using the regression analysis output, what would the total cost be if Kathryn's Moving Company is projecting 5,500 miles for the month of June? Total cost for 5,500 miles SUMMARY OUTPUT Regression Statistics Multiple R 0.999748147 R Square 0.999496357 Adjusted R Square 0.999328476 Standard Error 26.26128657 Observations 5 ANOVA df SS MS F Significance F Regression 1 4105931.034 4105931.034 5953.6 4.79776E-06 Residual 3 2068.965517 689.6551724 Total 4 4108000 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 1662.068966 48.3373992 34.38474128 5.4082E-05 1508.237788 1815.900143 1508.237788 1815.900143 # of Miles 0.84137931 0.010904406 77.15957491 4.79776E-06 0.806676625 0.876081996 0.806676625 0.876081996

Explanation / Answer

From your given information,

Regression equation is , Y = a +b*x ,    

where y= response variable = Total Cost    , x = Independnet variable = # of miles

a = intercept , b = slope

So, Regression equation is

Total Cost = 1662 + 0.84 * Miles

Then we have to find the total cost be if Kathryn's Moving Company is projecting 5,500 miles for the month of June .

So, Total cost = 1662 + 0.84 * Miles    = 1662 + 0.84 * 5500

                       = 1662 + 4620

    Total Cost = 6282

So, $6282 total cost if Kathryn's Moving Company is projecting 5,500 miles for the month of June .

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