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Regression analysis of the data given in Question 4 (part 1) produced the following output:
| SUMMARY OUTPUT | | | |
| | | | | |
| Regression Statistics | | | |
| Multiple R | 0.705591269 | | | |
| R Square | 0.497859039 | | | |
| Adjusted R Square | 0.447644943 | | | |
| Standard Error | 197087.9555 | | | |
| Observations | 12 | | | |
| | | | | |
| ANOVA | | | | |
| , | df | SS | MS | F |
| Regression | 1 | 3.85124E+11 | 3.85E+11 | 9.914727 |
| Residual | 10 | 3.88437E+11 | 3.88E+10 | |
| Total | 11 | 7.73561E+11 | , | , |
| | | | | |
| , | Coefficients | Standard Error | t Stat | P-value |
| Intercept | 30380.8769 | 368988.5767 | -0.08234 | 0.936005 |
| X Variable 1 | 1.46970772 | 0.466756746 | 3.148766 | 0.010355 |
(c) Write the total cost formula based on the above summary output.
(1 mark)
(d) Would you recommend that the company use the regression formula in (c) for estimating the total overhead cost? Why, or why not?
(3 marks)
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