Excel Online Structured Activity: Regression Equations and the Coefficient of De
ID: 3311392 • Letter: E
Question
Excel Online Structured Activity: Regression Equations and the Coefficient of Determination An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular In the Microsoft Excel Online file below you will find a sample of production volumes and total cost data for a manufacturing operation. Conduct a regression analysis to explore the relationship between total cost and production volume and then answer the questions that follow a. Compute bi and bo (to 1 decimal) bo 1246.66 Complete the estimated regression equation (to 1 decimal). 76 25%)Explanation / Answer
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.979127101
R Square 0.959
Adjusted R Square 0.948362349
Standard Error 241.5229458
Observations 6
ANOVA
df SS MS F Significance F
Regression 1 5415000 5415000 92.82857143 0.00064897
Residual 4 233333.3333 58333.33333
Total 5 5648333.333
Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept 2046.7 464.1599341 4.409399684 0.01160603 757.9520895 3335.381244
X Variable 7.6 0.788810638 9.634758504 0.00064897 5.409910566 9.790089434
b1 =7.6
bo = 2046.7
Estimated Regression Equation
y^ = 2046.7 + 7.6 * x
d) The companys production schedule shows 500 units must be produced next month then estimated total cost for this opration is, 5847
Total Cost($ ) = 2046.7 + 7.6 * 500
Total Cost($) = 5847
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