Duke Corporation Uses Least-Squares Regression to Analyze a Variety of Operating

question 41

Essay

Duke Corporation uses least-squares regression to analyze a variety of operating costs. A staff assistant determined that monthly machine hours (MH) have a strong cause-and-effect relationship with total maintenance costs, and generated the following statistics:
Intercept: $170,000
b coefficient: $3.80
Total machine hours for the year: 36,500
Required:
A. Construct the company's regression equation.
B. Based on your answer in part "A," identify Duke's dependent variable and independent variable.
C. What does the b coefficient really represent?
D. Predict the company's maintenance cost in a month when 3,200 machine hours are worked.

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