The Following Is Part of the Results of a Regression $\alpha$

question 49

Essay

The following is part of the results of a regression analysis involving sales (Y in millions of dollars), advertising expenditures (X₁ in thousands of dollars), and number of salespeople (X₂) for a corporation. The regression was performed on a sample of 10 observations.
a.Write the regression equation.
b.Interpret the coefficients of the estimated regression equation found in Part (a).
c.At $\alpha$ =0.05, test for the significance of the coefficient of advertising.
d.At $\alpha$ =0.05, test for the significance of the coefficient of number of salespeople.
e.If the company uses $50,000 in advertisement and has 800 salespersons, what are the expected sales? Give your answer in dollars.

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Definitions:

Variable Selling Costs

Variable selling costs are expenses that vary directly with the level of production or sales volume, such as commissions and shipping charges.

Variable Production Costs

Costs that vary directly with the level of production output, such as raw materials and direct labor, contrasting with fixed costs that remain constant regardless of production volume.

Fixed Costs

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance premiums.

Variable Costing

An accounting method in which costs that vary directly with production volume (such as materials and labor) are included in product costs, whereas fixed costs are not.