Thane Company Is Interested in Establishing the Relationship Between Electricity

question 65

Multiple Choice

Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:
$\begin{array}{lll}\text {Month}&\text {Machine Hours}&\text {Electricity Costs}\\\text { January } & 2,500 & \$ 18,400 \\\text { February } & 2,900 & 21,000 \\\text { March } & 1,900& 13,500 \\\text { April } & 3,100 & 23,000 \\\text { May } & 3,800& 28,250 \\\text { June } & 3,300& 22,000 \\\text { July } & 4,100 & 24,750\\\text { August } & 3,500 & 22,750 \\\text { September } & 2,000 & 15,500 \\\text { October } & 3,700 & 26,000 \\\text { November } & 4,700 & 31,000 \\\text { December } & 4,200 & 27,750\end{array}$



$$\begin{array}{c} { \text { Summary Output } } \\ { \text { Regression Statistics } } \\\begin{array}{ | l | c | } \hline \text { Multiple R } & 0.965 \\\hline \text { R Squuare } & 0.932 \\\hline \text { Adjusted R } ^2 & 0.925 \\\hline \text { Standard Error } & 1,425.18 \\\hline \text { Observations } & 12.00 \\\hline\end{array}\end{array}$$


$\begin{array}{|l|r|r|r|r|r|r|}\hline && \text { Standard } & && \text { Lower } & \text { Upper } \\&\text { Coefficients } & \text { Error } & \text { t Stat } & \text { P-value } & 95 \% & 95 \% \\ \hline \text { Intercept } & 3,726.88 & 1,682.82 & 2.21 & 0.05 & (22.69) & 7,476.45 \\\hline \text { Machine } & 5.77 & 0.49 & 11.7 & 0.00 & 4.67 & 6.87 \\\text { Hours } & & & & & \\\hline\end{array}$



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If the controller uses regression analysis to estimate costs, the estimate of the fixed portion of electricity costs is:

• A) Fixed Cost = $5.77.
• B) Fixed Cost = $1,682.82.
• C) Fixed Cost = $1,425.18.
• D) Fixed Cost = $3,726.88

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Definitions:

Medical Provider

A medical service provider or institution that offers healthcare assistance to individuals seeking treatment.

Terminally Ill Patients

Describes patients who have a disease that cannot be cured or adequately treated and is reasonably expected to result in the death of the patient within a short period of time.

Pain Relief

Various methods or treatments used to reduce or eliminate physical discomfort or pain.

Hospice

Volunteers who work with terminally ill patients and their families.