Degen Company Used Least Squares Regression Analysis to Obtain the Following

question 103

Essay

Degen Company used least squares regression analysis to obtain the following output:
Payroll Department Cost
Explained by Number of Employees
$\begin{array}{lr}\text { Constant } & \$ 7,540 \\\text { Standard error of } Y \text { estimate } & 819 \\\mathrm{r}^{2} & 0.8924 \\\text { Number of obærvations } & 20 \\\text { X coefficient(s) } & \$ 2.473 \\\text { Standard error of coefficient(s) } & 0.0966\end{array}$ Required:
a.What is the total fixed cost?
b.What is the variable cost per employee?
c.Prepare the linear cost function.
d.What is the coefficient of determination? Comment on the goodness of fit.

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Definitions:

Ratio

A mathematical relationship that compares two numbers or quantities, indicating how many times one value contains or is contained by the other.

Frequencies

The number of times an event occurs within a specified period, often used in the context of waves or signals.

Categorical Statistics

A branch of statistics that deals with variables that can be categorized into distinct groups and analyzes the frequency and distribution of these categories.

Class Relations

The ways in which classes (or sets) relate to each other, including inclusion, exclusion, and intersection relationships.