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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