Sago Co. uses regression analysis to develop a model for predicting overhead costs. Two different...
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Sago Co. uses regression analysis to develop a model for predicting overhead costs. Two different cost drivers (machine hours and direct materials weight) are under consideration as the independent variable. Relevant data were run on a computer using one of the standard regression programs, with the following results: Machine hours Coefficient y-intercept 2,500 b 5.0 r = .70 Direct materials weight y-intercept 4,600 b 2.6 r = .50 Which regression equation should be used? A. y = 2,500 + 5.0x B. y = 4,600 + 2.6x C. y = 4,600 + 1.3x D. y = 2,500 + 3.5x
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