The results of the regression analysis to estimate delivery costs are as follows: Which of the following is an appropriate cost equation based on the above regression output? A) Delivery costs = $366.39 + $0.58 X₁, where X₁ is the number of cargos. B) Delivery costs = $0.662 + $2.985 X₁, where X₁ is the number of cargos. C) Delivery costs = $242.51 + $1.74 X₁, where X₁ is the number of cargos. D) Delivery costs = $48861.07 + $1.74 X₁, where X₁ is the number of cargos.

Question

Quizplus · Accepted Answer

The appropriate cost equation based on the regression output is the one with the coefficient values. In this case, the equation is Delivery costs = $242.51 + $1.74 X₁, where X₁ is the number of cargos. This equation gives the best estimate of the relationship between delivery costs and the number of cargos.

The Results of the Regression Analysis to Estimate Delivery Costs