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Ellington Corporation uses least-squares regression to analyze a variety of operating costs. A staff assistant determined...

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Accounting

Ellington Corporation uses least-squares regression to analyze avariety of operating costs. A staff assistant determined thatmonthly machine hours (MH) have a strong cause-and-effectrelationship with total maintenance costs, and generated thefollowing statistics: Intercept: $170,000 b coefficient: $3.80Total machine hours for the year: 36,500

Required: A. Construct the company's regression equation. B.Based on your answer in part "A," identify Ellington's dependentvariable and independent variable. C. What does the b coefficientreally represent? D. Predict the company's maintenance cost in amonth when 3,200 machine hours are worked.

Answer & Explanation Solved by verified expert
3.8 Ratings (568 Votes)
In regression equation Yrepresents the total cost bo represents the total fixed costsb    See Answer
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