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:
$\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\
\text { Constant } & \$ 74.79 & \$ 16.82 & 4.45 \
\text { Independent variable } & \$ 1,081.76 & \$ 215.67 & 5.02\
r62=0.75
\end{array}$ 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:
 $\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\
\text { Constant } & \$ 74.79 & \$ 16.82 & 4.45 \
\text { Independent variable } & \$ 1,081.76 & \$ 215.67 & 5.02\
r62=0.75
\end{array}$ 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:
 $\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\
\text { Constant } & \$ 74.79 & \$ 16.82 & 4.45 \
\text { Independent variable } & \$ 1,081.76 & \$ 215.67 & 5.02\
r62=0.75
\end{array}$ 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