Clough Company is interested in establishing the relationship between utility costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month January February March April May June July August September October November December SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R-Square Standard Error Observations Intercept Machine Hours Machine Hours 3,250 3,770 2,470 4,030 4,940 4,290 5,330 4,550 2,600 4,810 6,110 5,460 96.5% 93.2% 92.5% 1,710 21 12.00 4,472.26 5.329 Utility Costs S + 22,080 25,200 16,200 27,600 33,900 26,400 29,700 27,300 18,600 31,200 37,200 33,300 Coefficients Standard Errort Stat 2,019 39 2.21 P-value 0.051 0.455 11.70 3.69E-07 0 Lower Upper 95% 95% -27 23 8971.74 4.314 6.343 Required: 1. What is the equation for utility costs using the regression analysis? Does the variable "machine hours" have statistical significance? Explain. 2. What is the equation for utility costs using high-low method? If November data is missing, which month will be chosen as the high point in high-low method? 3. Prepare an estimate of utility costs for a quarter (3 months) when 12,000 machine hours are worked with high-low method.
Clough Company is interested in establishing the relationship between utility costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month January February March April May June July August September October November December SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R-Square Standard Error Observations Intercept Machine Hours Machine Hours 3,250 3,770 2,470 4,030 4,940 4,290 5,330 4,550 2,600 4,810 6,110 5,460 96.5% 93.2% 92.5% 1,710 21 12.00 4,472.26 5.329 Utility Costs S + 22,080 25,200 16,200 27,600 33,900 26,400 29,700 27,300 18,600 31,200 37,200 33,300 Coefficients Standard Errort Stat 2,019 39 2.21 P-value 0.051 0.455 11.70 3.69E-07 0 Lower Upper 95% 95% -27 23 8971.74 4.314 6.343 Required: 1. What is the equation for utility costs using the regression analysis? Does the variable "machine hours" have statistical significance? Explain. 2. What is the equation for utility costs using high-low method? If November data is missing, which month will be chosen as the high point in high-low method? 3. Prepare an estimate of utility costs for a quarter (3 months) when 12,000 machine hours are worked with high-low method.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Transcribed Image Text:Clough Company is interested in establishing the
relationship between utility costs and machine hours. Data
have been collected and a regression analysis prepared
using Excel. The monthly data and the regression output
follow:
Month
January
February
March
April
May
June
July
August
September
October
November
December
SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R-Square
Standard Error
Observations
Intercept
Machine Hours
Machine Hours
3,250
3,770
2,470
4,030
4,940
4,290
5,330
4,550
2,600
4,810
6,110
5,460
96.5%
93.2%
92.5%
1,710 21
12.00
4,472.26
5.329
Utility Costs
S
+
22,080
25,200
16,200
27,600
33,900
26,400
29,700
27,300
18,600
31,200
37,200
33,300
Coefficients Standard Errort Stat
2,019 39 2.21
P-value
0.051
0.455 11.70 3.69E-07
0
Lower
Upper
95%
95%
-27 23 8971.74
4.314
6.343
Required:
1. What is the equation for utility costs using the regression
analysis? Does the variable "machine hours" have statistical
significance? Explain.
2. What is the equation for utility costs using high-low
method? If November data is missing, which month will be
chosen as the high point in high-low method?
3. Prepare an estimate of utility costs for a quarter (3 months)
when 12,000 machine hours are worked with high-low
method.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: Write the given information.
VIEWStep 2: Determine the equation for utility costs using regression equation.
VIEWStep 3: Determine whether the variable "machine hours" have statistical significance.
VIEWStep 4: Determine the equation for utility costs using high low method.
VIEWStep 5: Estimate the utility costs for a quarter when 12000 machine hours are worked with high low method.
VIEWSolution
VIEW
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 18 images
Recommended textbooks for you
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman