The new cost analyst in your accounting department has just received a computer-generated report that contains the results of a simple regression program for cost estimation.The summary results of the report appear as follows:
$$\begin{array}{l}
\begin{array} { l c c c }
\text { Variable } & \text { Coefficient } & \text { Standard Error } & \text { t-Value } \
\text { Constant } & \$ 35.92 & \$ 16.02 & 2.24 \
\text { Independent variable } & \$ 563.80 & \$ 205.40 & 2.74
\end{array}\
\mathrm { r } ^ { 2 } = 0.75
\end{array}$$
Required:
a.What is the cost estimation equation according to the report?
b.What is the goodness of fit? What does it tell about the estimating equation?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question

The new cost analyst in your accounting department has just received a computer-generated report that contains the results of a simple regression program for cost estimation.The summary results of the report appear as follows:
 $$\begin{array}{l}
\begin{array} { l c c c } 
\text { Variable } & \text { Coefficient } & \text { Standard Error } & \text { t-Value } \
\text { Constant } & \$ 35.92 & \$ 16.02 & 2.24 \
\text { Independent variable } & \$ 563.80 & \$ 205.40 & 2.74
\end{array}\
\mathrm { r } ^ { 2 } = 0.75
\end{array}$$ 
Required:
a.What is the cost estimation equation according to the report?
b.What is the goodness of fit? What does it tell about the estimating equation?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Quizplus · Accepted Answer

The Answer of The new cost analyst in your accounting department has just received a computer-generated report that contains the results of a simple regression program for cost estimation.The summary results of the report appear as follows:
 $$\begin{array}{l}
\begin{array} { l c c c } 
\text { Variable } & \text { Coefficient } & \text { Standard Error } & \text { t-Value } \
\text { Constant } & \$ 35.92 & \$ 16.02 & 2.24 \
\text { Independent variable } & \$ 563.80 & \$ 205.40 & 2.74
\end{array}\
\mathrm { r } ^ { 2 } = 0.75
\end{array}$$ 
Required:
a.What is the cost estimation equation according to the report?
b.What is the goodness of fit? What does it tell about the estimating equation?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

The New Cost Analyst in Your Accounting Department Has Just