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:

Inventory Effect

The impact that changes in inventory levels have on a company's financial statements, including effects on working capital, cash flow, and profitability.

Inverse Relationship

A relationship between two variables where one variable increases as the other decreases, or vice versa.

Lost Sales

Potential sales opportunities that have been missed or unattained, often due to factors like stockouts or service issues.

Inventory Costs

Expenses associated with holding and managing inventory, including costs related to storage, insurance, taxes, and depreciation.