Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. The following data were collected from last year's operations (revenues and costs in thousands of dollars). Store Revenues 101 $4,150 102 103 104 105 106 107 108 109 110 111 112 113 114 115 2,277 5,813 4,082 2,989 4, 123 6,944 1,854 5,666 3,378 3,986 4,815 Costs $4,289 2,994 5,256 4, 123 3,826 3,494 5,104 2,624 4,888 3,602 5,017 3,109 4,304 3,300 2,706 4,755 2,374 3,061
Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. The following data were collected from last year's operations (revenues and costs in thousands of dollars). Store Revenues 101 $4,150 102 103 104 105 106 107 108 109 110 111 112 113 114 115 2,277 5,813 4,082 2,989 4, 123 6,944 1,854 5,666 3,378 3,986 4,815 Costs $4,289 2,994 5,256 4, 123 3,826 3,494 5,104 2,624 4,888 3,602 5,017 3,109 4,304 3,300 2,706 4,755 2,374 3,061
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.6: Summarizing Categorical Data
Problem 26PPS
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Transcribed Image Text:Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are
considering expanding by opening new stores and are interested in estimating costs in potential new locations. They
believe that costs are driven in large part by store volume measured by revenue. The following data were collected from
last year's operations (revenues and costs in thousands of dollars).
Store Revenues
101
$4, 150
102
2,277
103
5,813
104
4,082
105
2,989
106
4, 123
107
108
109
R2
110
111
112
113
114
115
6,944
1,854
5,666
3,378
3,986
4,815
3,602
5,017
2,374
Costs
$4,289
2,994
5,256
4,123
3,826
3,494
5, 104
2,624
4,888
3,109
4,304
3,300
2,706
4,755
3,061
mple regression results from the data of Davis Stores are as follows.
Equation:
Store costs = $1,716.9+ (Revenue x 52.5%)
Statistical data
Correlation coefficient
0.838
0.703
=quired:
Estimate store costs for a store with revenue of $3.0 million.
What percentage of the variation in store costs is explained by the independent variable?
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