South by Southwest Company Used Least Squares Regression Analysis to Obtain

question 115

Essay

South by Southwest Company used least squares regression analysis to obtain the following output:

$\begin{array}{ll}X \text { coefficient(s) } & \$ 2.473 \\\text { Standard error of coefficient(s) } & 0.0966\end{array}$
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:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered but not yet paid for.

Bankrupt

A legal status of a person or entity that cannot repay the debts it owes to creditors.

Allowance for Doubtful Accounts

A contra-asset account that represents the amount of accounts receivable that is expected to be uncollectible.

Debit Balance

An excess of debits over credits in a ledger account, typically indicating an increase in assets or expenses.