Method of Least Squares, Goodness of FitDeepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the radiological tests would be primarily fixed, but she found that costs increased with the number of tests performed. Costs for this service over the past nine months are as follows:MonthRadiology TestsTotal CostJanuary2,800$133,500February2,600135,060March3,100175,000April3,500170,600May3,400176,900June3,700186,600July3,840174,450August4,100195,510September3,450185,300Required:1. Compute the cost formula for radiology services using the method of least squares. If required, round your answers to two decimal places.Y= +X2. Using the formula computed in Requirement 1, what is the predicted cost of radiology services for October for 3,500 appointments? (Round the answer to the nearest dollar.)

y = bx + a Where b = SSxy/SSxx and a = y-bar - (b * x-bar) Calculations:

Answered: equired: 1. Compute the cost formula…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Method of Least Squares, Goodness of Fit

Deepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the radiological tests would be primarily fixed, but she found that costs increased with the number of tests performed. Costs for this service over the past nine months are as follows:

Month	Radiology Tests	Total Cost
January	2,800	$133,500
February	2,600	135,060
March	3,100	175,000
April	3,500	170,600
May	3,400	176,900
June	3,700	186,600
July	3,840	174,450
August	4,100	195,510
September	3,450	185,300

Required:

1. Compute the cost formula for radiology services using the method of least squares. If required, round your answers to two decimal places.

2. Using the formula computed in Requirement 1, what is the predicted cost of radiology services for October for 3,500 appointments? (Round the answer to the nearest dollar.)

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