The Lindsey Company Used Regression Analysis to Predict the Annual

question 30

Multiple Choice

The Lindsey Company used regression analysis to predict the annual cost of utilities.The results were as follows:
$\begin{array}{ll}&\text { Utilities Cost }\\&\text { Explained by Direct Labor Hours }\\\text { Constant } & 5,000 \\\text { Standard error of } Y \text { estimate } & 595 \\\text { R-Squared } & 0.87 \\\text { No. of observations } & 30 \\\text { Degrees of freedom } & 28 \\\text { X Coefficient } & 4.02 \\\text { Standarderror of coefficient } & 0.81\end{array}$
The linear cost function is ________ where Y = Total utilities cost and X = Number of direct labor hours.

• A) Y = $5,000 + $0.87X
• B) Y = $5,000 + $0.81X
• C) Y = $595 + $0.81X
• D) Y = $5,000 + $4.02X

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Definitions:

Direct Labor-Hours

The total hours of labor time directly involved in the production of goods or services.

Materials Handling Cost

The expenses associated with moving, storing, and controlling materials used in the manufacturing process.

Material Moves

The process or sequence of logistics that involves the moving, handling, and storing of raw materials in a manufacturing or production facility.

Specialty Windows

Custom or unique window products designed to meet specific aesthetic, functional, or architectural requirements.