Clough Company Is Interested in Establishing the Relationship Between Utility

question 21

Essay

Clough Company is interested in establishing the relationship between utility costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:
$\begin{array}{llll}&&\text { Utility } \\\text { Month } & \text { Machine Hours } & \text { Costs }\\\text { January } & 3,250& \$ 2,080 \\\text { February } & 3,77 0 & 25,200 \\\text { March } & 2,470 & 16,200 \\\text { April } & 4,030 & 27,600 \\\text { May } & 4,940 & 33,900 \\\text { June } & 4,290 & 26,400 \\\text { July } & 5,330 & 29,700 \\\text { August } & 4,550 & 27,300 \\\text { September } & 2,600 & 18,600 \\\text { October } & 4,810 & 31,200 \\\text { November } & 6,110 & 37,200 \\\text { December } & 5,460& 33,300\end{array}$

$$\begin{array}{c}\text { SUMMMARY OUTPUT}\\\text { Regression Statistics}\\\begin{array} { l r } \text { Multiple R } &96.5 \% \\\text { R Square } &93.2 \% \\\text { Adjusted R-Square } &92.5 \% \\\text { Starndard Eror } & 1,710.21\\\text { Obserrations } & 12.00 \\\end{array}\end{array}$$
$\begin{array}{|l|r|r|r|r|r|r|}\hline && \text { Standard } & && \text { Lower } & \text { Upper } \\&\text { Coefficients } & \text { Error } & \text { t Stat } & \text { P-value } & 95 \% & 95 \% \\ \hline \text { Intercept } & 4,472.26 & 2,019.39 & 2.21 & 0.051 & -27.23 & 8971.74 \\\hline \text { Machine } & 5.329 & 0.455 & 11.70 & 3.69 \mathrm{E}-07 & 4.314 & 6.343 \\\hline \end{array}$


Required:
(a.) What is the equation for utility costs using the regression analysis?
(b.) Does the variable "machine hours" have statistical significance? Explain.
(c.) Prepare an estimate of utility costs for a month when 3,000 machine hours are worked.

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Definitions:

Unreasonable Orders

Commands or directives that are excessively demanding, unethical, or impossible to fulfill.

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Instructions or commands that could potentially lead to harm or adverse effects on individuals or groups if carried out.

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