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Thane Company is interested in establishing the relationship between electricity costs

Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:
  

Month Machine Hours Electricity Costs
January 3,400 $ 18,850  
February 3,800 $ 21,900  
March 2,800 $ 13,950  
April 4,000 $ 23,900  
May 4,700 $ 28,700  
June 4,200 $ 22,900  
July 5,300 $ 25,200  
August 4,400 $ 23,200  
September 2,900 $ 16,400  
October 4,600 $ 26,900  
November 6,500 $ 31,900  
December 5,800 $ 28,200  
 

  

Summary Output
Regression Statistics
Multiple R .928
R Square .862
Adjusted R2 .848
Standard Error 2,039.35
Observations 12.00
  Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept 4,492.22 2,479.75 1.81 0.10 (1,033.00) 10,017.44
Machine Hours 4.35 0.55 7.89 0.00 3.12 5.58


If the controller uses regression analysis to estimate costs, the cost equation for electricity cost is:

Cost = $4,492.22 + $2,479.75 × Machine-hours.

Cost = $2,479.75 + $0.55 × Machine-hours.

Cost = $4,492.22 + $4.35 × Machine-hours.

Cost = $2,039.35 + $12.00 × Machine-hours.

Feb 06 2020 View more View Less

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