Pam's Stables used two different independent variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows: Trainer's hours:

R² = 0.56
Number of horses:

R² = 0.63
What is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained, based on the best cost driver?

Question

Pam's Stables used two different independent variables (trainer hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows: Trainer's hours:

R² = 0.56
Number of horses:

R² = 0.63
What is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained, based on the best cost driver?

Quizplus · Accepted Answer

y = $4,764.50 + ($864.98 × 400) = $350,756.50 based on highest r², which uses of horses as the cost driver

Pam's Stables Used Two Different Independent Variables (Trainer Hours and Number