Louis Katz, a cost accountant at Papalote Plastics, Inc. (PPI), is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI. Louis's independent variable is production lot size (in 1,000's of units), and his dependent variable is the total cost of the lot (in $100's). Regression analysis of the data yielded the following tables. Coefficients Standard Error t Statistic p-value Intercept 3.996 1.161268 3.441065 0.004885 x 0.358 0.102397 3.496205 0.004413 Source df SS MS F Se = 0.898 Regression 1 9.858769 9.858769 12.22345 r2 = 0.526341 Residual 11 8.872 0.806545 Total 12 18.73077 Using a = 0.05, Louis should
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Louis Katz, a cost accountant at Papalote Plastics, Inc. (PPI), is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI. Louis's independent variable is production lot size (in 1,000's of units), and his dependent variable is the total cost of the lot (in $100's). Regression analysis of the data yielded the following tables.
|
|
Coefficients |
Standard Error |
t Statistic |
p-value |
|
Intercept |
3.996 |
1.161268 |
3.441065 |
0.004885 |
|
x |
0.358 |
0.102397 |
3.496205 |
0.004413 |
|
Source |
df |
SS |
MS |
F |
|
Se = 0.898 |
|
Regression |
1 |
9.858769 |
9.858769 |
12.22345 |
|
r2 = 0.526341 |
|
Residual |
11 |
8.872 |
0.806545 |
|
|
|
|
Total |
12 |
18.73077 |
|
|
|
|
Using a = 0.05, Louis should ________________.
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