(A)Estimate the Regression Model

question 22

Essay

(A)Estimate the regression model.How well does this model fit the data?
(B)Is there a linear relationship between the explanatory variables and the dependent variable? Explain how you arrived at your answer at the 5% significance level.
(C)Use the estimated regression model to predict the amount of money a customer will spend if their annual salary is $45,000,they have 1 child and they were a customer that purchased merchandise in the previous year (2004).
(D)Find a 95% prediction interval for the point prediction calculated in (C).Use a t-multiple = 2.02.
(E)Find a 95% confidence interval for the amount of money spent by all customers sharing the characteristics described in (C).Use a t-multiple = 2.02.
(F)How do you explain the differences between the widths of the intervals in (D)and (E)?

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Definitions:

Labor Quantity Variance

The difference between the actual hours worked and the standard hours allowed for the work performed, multiplied by the standard hourly wage rate.

Produced

The completed output of goods or services as a result of manufacturing or production processes.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of those materials.

Direct Materials Quantity Variance

The variance between the real amount of materials consumed in production and the anticipated standard amount, multiplied by the cost per unit according to standards.