TABLE 13- 11
a Company That Has the Distribution Rights

question 155

True/False

TABLE 13- 11
A company that has the distribution rights to home video sales of previously released movies would like to use the box office gross (in millions of dollars) to estimate the number of units (in thousands of units) that it can expect to sell. Following is the output from a simple linear regression along with the residual plot and normal probability plot obtained from a data set of 30 different movie titles:
$$\begin{array}{l}\text { Regression Statistics }\\\begin{array} { l c } \hline \text { Multiple R } & 0.8531 \\\text { RSquare } & 0.7278 \\\text { Adjusted R Square } & 0.7180 \\\text { Standard Error } & 47.8668 \\\text { Observations } & 30\end{array}\end{array}$$
ANOVA
$\begin{array}{lrrrrr}\hline &\text { d f}& \text { SS } & \text { MS } & \text {F }& \text {Significance F} \\\hline \text {Regression }& 1 & 171499.78 & 171499.78 & 74.8505 & 2.1259E-09 \\\text {Residual} & 28 & 64154.42 & 2291.23 & & \\\text {Total} & 29 & 235654.20 & & & \\\hline\end{array}$

$\begin{array}{lrrrrrr}\hline & \text {Coefficients }& \text { Standard Error}& \text { t Stat }& \text { p -value }& \text {Lower 95\% }& \text {Upper 95\% }\\\hline \text { Intercept }& 76.5351 & 11.8318 & 6.4686 & 5.24 \mathrm{E}-07& 52.2987 & 100.7716 \\ \text {Gross} & 4.3331 & 0.5008 & 8.6516 & 2.13 \mathrm{E}-09 & 3.3072 & 5.3590 \\\hline\end{array}$



TABLE 13-5
$\begin{array}{lc}\hline \text {Regression Statistics } \\\hline \text { Multiple R} & 0.802 \\ \text {R Square} & 0.643 \\ \text {Adjusted R Square} & 0.618 \\ \text {Standard Error SYX }& 0.9224 \\ \text {Observations} & 16 \\\hline\end{array}$

ANOVA
$\begin{array}{lrlrlr}\hline & \text {d f } & \text { SS} & \text { MS } & \text {F } & \text { Sig.F }\\\hline \text { Regression }& 1 & 21.497 & 21.497 & 25.27 & 0.000 \\ \text {Error }& 14 & 11.912 & 0.851 & & \\ \text {Total }& 15 & 33.409 & & & \\\hline\end{array}$

$\begin{array}{lllrr}\hline \text {Predictor} & \text {Coefficients} &\text { Standard Error }&\text { t Stat }& \text { p -value} \\\hline \text {Intercept} & 3.962 & 1.440 & 2.75 & 0.016 \\\text {Industry} & 0.040451 & 0.008048 & 5.03 & 0.000 \\\hline\end{array}$
-Referring to Table 13-11, the null hypothesis that there is no linear relationship between box office gross and home video unit sales should be reject at a 5% level of significance.

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Definitions:

Variable Overhead Rate

A measure used to estimate the variable costs that a business incurs during the production of a good or service.

Direct Labor Hours

The amount of time spent by workers directly involved in manufacturing a product.

Direct Materials

Raw materials that can be directly linked to the production of specific goods or services in a manufacturing process.

Fluid Ounces

A unit of volume used primarily in the United States to measure liquids, equivalent to approximately 29.57 ml.