Burmer Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. Data regarding the machine hours and maintenance costs for the last year and the results of the regression analysis are as follows:
A staff assistant has run regression analyses on the data and obtained the following output using Excel:
REGRESSION ANALYSIS
Y (Dependent) Variable: Maintenance Cost
X (Independent) Variable: Maintenance Hours
The Lower 95% and Upper 95% shown in the output suggests that:
Definitions:
Hindsight Bias
The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often referred to as the "I-knew-it-all-along" phenomenon.
Scientific Inquiry
A systematic process of investigating natural phenomena through observation, experimentation, and data analysis.
Intuition
The capacity to grasp concepts instantaneously, without relying on deliberate thought.
Overconfident
A psychological condition where an individual's belief in their own abilities or chances of success exceeds reality.
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