Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver.The output of regression analysis showed the following information:
Intercept Coefficient = 89,620
X Variable 1 Coefficient = 62.53
R-square = 0.9852
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What is the company's monthly cost equation?
A)y = $62.53x + $89,620
B)y = $98.52x + $89,620
C)y = $89,620x + $62.98
D)y = $89,620x + $98.52

Question

Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver.The output of regression analysis showed the following information: 
Intercept Coefficient = 89,620
X Variable 1 Coefficient = 62.53
R-square = 0.9852
-
What is the company's monthly cost equation?
A)y = $62.53x + $89,620
B)y = $98.52x + $89,620
C)y = $89,620x + $62.98
D)y = $89,620x + $98.52

Quizplus · Accepted Answer

The monthly cost equation is in the form of y = mx + b, where y is the monthly operating cost, x is the cost driver, and m and b are the coefficients. From the given information, we know that the Intercept Coefficient (b) is $89,620 and the X Variable 1 Coefficient (m) is $62.53. Therefore, the monthly cost equation is y = $62.53x + $89,620.

Your Client's Company Wants to Determine the Relationship Between Its