A company has observed that there is a linear relationship between indirect labo

Question

A company has observed that there is a linear relationship between indirect labor expense (ILE) , in dollars, and direct labor hours (DLH). Data for direct labor hours and indirect labor expense for 18 months are given in the file ILE_and_DLH.xlsx

Treating ILE as the response variable, use regression to fit a straight line to all 18 data points.

Using your estimated regression output, predict the indirect labor expenses for a month in which the company has 31 direct labor hours.

Place your answer, rounded to 1 decimal place, in the blank. Do not use any stray punctuation marks or a dollar sign. For example, 458.9 would be a legitimate entry

Explanation / Answer

COEFFICIENT:

Intercept = 1.48

X variable 1 = 0.074

So regression equation is:

Y = 1.48 + 0.074 X

X = 31 predicted value of Y is

1.48 + 0.074*31

= 3.774

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