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Choose the correct statement(s) that explain the meaning of 200 and 4 in the regression equation S = $200 + $4H.

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• The regression equation's intercept on the vertical axis is $200.
• The slope of the regression line is $4 per machine hour.
• The regression equation's intercept on the vertical axis is $4 per machine hour.
• The slope of the regression line is $200.
• None of these choices are correct.

To determine the validity of the cost estimate computed in requirement 2, what question(s) would you ask the controller about the data used for the regression?

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Check my work is not available.

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• Do the observations contain any outliers, or are they all representative of normal operations?unanswered
• Are there any mismatched time periods in the data? Are all of the indirect material cost observations matched properly with the machine hour observations?unanswered
• Are there any allocated costs included in the indirect material cost data?unanswered
• Are the cost data affected by inflation?unanswered
• None of these choices are correct.

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