The Reynolds Company used regression analysis to predict the annual cost of utilities. The results were as follows: Utilities Cost
Explained by Direct Labor Hours
$\begin{array}{lr}
\text { Constant } & \$ 7,650 \
\text { Standard error of Y estimate } & \$ 245.20 \
\text { R - squared } & 0.8650 \
\text { No. of observations } & 30 \
\text { Degrees of freedom } & 28 \
& \
\text { X coefficients) } & 8.437 \
\text { Standard error of coefficients) } & 0.917
\end{array}$ The linear cost function is_____.
A)Y = $7,650 + $8.437X
B)Y = $245.20 + $8.437X
C)Y = $7,650 + $0.0917X
D)none of these answers is correct

Question

Quizplus · Accepted Answer

The linear cost function is represented by the equation Y = Constant + (Coefficient of X)X. Here, the constant is $7,650 and the coefficient of X (direct labor hours) is 8.437, making the correct equation Y = $7,650 + $8.437X.

The Reynolds Company Used Regression Analysis to Predict the Annual