Identify the Components of Simple Linear Regression Models and Discuss

question 21

Multiple Choice

Identify the components of simple linear regression models and discuss their applications Use the data given below to answer the following question(s) .
The worldwide sales of cars from 1981-1990 are shown in the table below. Given: α = 0.2 and β
= 0.15 (Hint: Use XLMiner) $$\begin{array} { | c | c | } \hline \text { Year } & \begin{array} { c } \text { Units sold in } \\\text { thousands }\end{array} \\\hline 1981 & 888 \\\hline 1982 & 900 \\\hline 1983 & 1000 \\\hline 1984 & 1200 \\\hline 1985 & 1100 \\\hline 1986 & 1300 \\\hline 1987 & 1250 \\\hline 1988 & 1150 \\\hline 1989 & 1100 \\\hline 1990 & 1200 \\\hline\end{array}$$
-Which of the following equations is the trend line equation for the given data? (Note: the fitted model assumes that the years are numbered 1 through 10, not the actual dates.)

• A) 60.123x + 481.56
• B) 48.16x + 481.86
• C) 32.17x + 931.87
• D) 57.15x + 503.81

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services and are considered a variable cost.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding direct materials and direct labor.

Factory Rent

Factory rent refers to the cost associated with leasing a premise for manufacturing operations, classified as an overhead expense in accounting.

Prime Costs

The sum of expenses for the raw materials and labor directly involved in the manufacturing of a product.