. Spirit Freightways is a leader in transporting agricultural products in the western provinces of Canada. Reese Brown, a financial analyst at Spirit Freightways, is studying the behav- ior of transportation costs for budgeting purposes. Transportation costs at Spirit are of two types: (a) operating costs (such as labor and fuel) and (b) maintenance costs (primarily overhaul of vehicles). Brown gathers monthly data on each type of cost, as well as the total freight miles traveled by Spirit vehicles in each month. The data collected are shown below (all in thousands): Operating Costs $ 942 Month Maintenance Costs Freight Miles $ 974 January February 1,710 1,008 76 2,655 March 1,218 686 2,705 April May 1,380 694 4,220 1,484 588 4,660 June 1,548 422 4,455 4,435 July August September 1,568 352 1,972 420 4,990 1,190 564 2,990 October 1,302 788 2,610 November 962 762 2,240 December 772 1,028 1,490 1. Conduct a regression using the monthly data of operating costs on freight miles. You should obtain the following result: Regression. Operating costs = a + (b x Number of freight miles) Variable Coefficient Standard Error t-Value Constant $445.76 $112.97 3.95 Independent variable: No. of freight miles $ 0.26 $ 0.03 7.83 p2 = 0.86; Durbin-Watson statistic = 2.18 %3D %3D
. Spirit Freightways is a leader in transporting agricultural products in the western provinces of Canada. Reese Brown, a financial analyst at Spirit Freightways, is studying the behav- ior of transportation costs for budgeting purposes. Transportation costs at Spirit are of two types: (a) operating costs (such as labor and fuel) and (b) maintenance costs (primarily overhaul of vehicles). Brown gathers monthly data on each type of cost, as well as the total freight miles traveled by Spirit vehicles in each month. The data collected are shown below (all in thousands): Operating Costs $ 942 Month Maintenance Costs Freight Miles $ 974 January February 1,710 1,008 76 2,655 March 1,218 686 2,705 April May 1,380 694 4,220 1,484 588 4,660 June 1,548 422 4,455 4,435 July August September 1,568 352 1,972 420 4,990 1,190 564 2,990 October 1,302 788 2,610 November 962 762 2,240 December 772 1,028 1,490 1. Conduct a regression using the monthly data of operating costs on freight miles. You should obtain the following result: Regression. Operating costs = a + (b x Number of freight miles) Variable Coefficient Standard Error t-Value Constant $445.76 $112.97 3.95 Independent variable: No. of freight miles $ 0.26 $ 0.03 7.83 p2 = 0.86; Durbin-Watson statistic = 2.18 %3D %3D
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 9EA: The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express...
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