Regression Analysis the Local Grocery Store Wants to Predict

question 11

Multiple Choice

Regression Analysis The local grocery store wants to predict the daily sales in dollars.The manager believes that the amount of newspaper advertising significantly affects the store sales.He randomly selects 7 days of data consisting of daily grocery store sales (in thousands of dollars) and advertising expenditures (in thousands of dollars) .The Excel/Mega-Stat output given above summarizes the results of the regression model. What are the limits of the 99% prediction interval of the daily sales in dollars of an individual grocery store that has spent $3000 on advertising expenditures? The distance value for this particular prediction is reported as .164.

• A)$64,496 to $102.170
• B)$33,108 to $133,558
• C)$71,324 to $95,342
• D)$51,314 to $115,353
• E)$42,851 to $83,816

---

Definitions:

Incremental Costs

The additional costs incurred when a business increases its level of activity or output, also known as marginal cost.

Additional Revenues

Income received that is over and above the main or expected sources of revenue for a business or an organization.

Direct Material

Raw materials that are directly attributable to the production of goods, essential in determining the cost of goods sold.

Direct Labor

Direct Labor refers to the work of employees that is directly associated with the production of goods or the provision of services, distinguishable as wages for hands-on work.