scatter diagram 2
b.
What does the scatter diagram developed in part (a) indicate about
the relationship between the two variables?
Positive
d.
Use the least squares method to develop the estimated
regression equation (to 3 decimals).
= +
x
Y=-17.004 + 12.966x
e.
For every additional car placed in service, estimate how much
annual revenue will change.
Increase by $12,966
f.
Fox Rent A Car has 11,000 cars in service. Use the estimated
regression equation developed in part (c) to predict annual
revenue
for Fox
$126 million
once again getting all these answers using ti-84 linreg(a+bx)

5)
Given are five observations for two variables,
x
and
y
.
x
i
1
2
3
4
5
y
i
4
7
7
11
15
The estimated regression equation for these data is
= 1 + 2.6
x
.
a.
Compute SSE, SST, and SSR using the following equations (to 1
decimal).
5.2
72.8
67.6
SSE
SST
SSR

b.
Compute the coefficient of determination
r
2
(to 3 decimals).
0.929
Does this least squares line provide a good fit?
Yes, the least squares line provides a very good fit
c.
Compute the sample correlation coefficient (to 4 decimals).
0.9636

6
) The data from exercise 3 follow.
Excel File:
data14-17.xls
The estimated regression equation for these data is
= 7.6 + .9
x
.
Compute SSE, SST, and SSR (to 1 decimal).
Solution
Correct Response
eBook
{Exercise 14.17}
The data from exercise 3 follow.
Excel File:
data14-17.xls

The estimated regression equation for these data is = 7.6 + .9
x
.
Compute SSE, SST, and SSR (to 1 decimal).
127.3
281.2
153.9
What percentage of the total sum of squares can be accounted for by
the estimated regression equation (to 1 decimal)?
%
54.7%
What is the value of the sample correlation coefficient (to 3 decimals)?
0.740
SSE
SST
SSR

7
_
An important application of regression analysis in accounting is in
the estimation of cost. By collecting data on volume and cost and using
the least squares method to develop an estimated regression equation
relating volume and cost, an accountant can estimate the cost
associated with a particular manufacturing volume. Consider the
following sample of production volumes and total cost data for a
manufacturing operation.
Production Volume
(units)
Total Cost ($)
400
3,900
450
4,900
550
5,300
600
5,800
700
6,300
750
6,900
a.
Compute
b
1
and
b
0
(to 1 decimal).
b
1
7.60
b
0
1146.7
Complete the estimated regression equation (to 1 decimal).
= +
x
Y = 1146.7 + 7.6x
b.
What is the variable cost per unit produced (to 1 decimal)?
7.6
c.
Compute the coefficient of determination (to 3 decimals). Note:
report
r
2
between 0 and 1.
r
2
=
0.959
What percentage of the variation in total cost can be explained by the
production volume (to 1 decimal)?
95%
d.
The company's production schedule shows 500 units must be
produced next month. What is the estimated total cost for this
operation (to the nearest whole number)?
$4947

8)
The data from exercise 3 follow.
Excel File:
data14-25.xls
The estimated regression
equation is
= 7.6 + .9
x
.
a.
What is the value of the standard error of the
estimate (to 4 decimals)?

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- Fall '14
- Statistics and Probability, Statistics, Least Squares, Linear Regression, Regression Analysis, Regression, Ch14, Cengage Stat, Cengage Stat Ch 14, Cengage Stat Ch14 Answers