Question

Tony Pena, owner and manager of Tony’s Pizza. This is a small store that delivers 12-inch pepperoni pizzas for phoned-in orders. Each pizza sells for $10. Tony has the following data concerning the prior 12 months of operations:
Tony Pena, owner and manager of Tony's Pizza. This is a small store that delivers 12-inch pepperoni pizzas for phoned-in orders. Each pizza sells for $10. Tony has the following data concerning the prior 12 months of operations: Total Operating Costs $40,232 40,544 October Pizzas Prepared 5,513 6,067 6,690 7,000 2,586 November December 42,897 January February March April 3,000 May 3,492 3,718 4,010 44,564 30,549 34,536 36,216 36,291 37,373 37,655 38,423 39,099 $458,379 June 4,366 4,735 July August September Total 4,806 55,983 Required 1. Using this monthly data:

Answer 1

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.96656242
R Square	0.93424292
Adjusted R Square	0.92766721
Standard Error	1004.89638
Observations	12
ANOVA
	df	SS	MS	F	Significance F
Regression	1	143469578.9	143469579	142.074868	3.1122E-07
Residual	10	10098167.32	1009816.73
Total	11	153567746.3
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	26324.5004	1037.538848	25.3720624	2.0742E-10	24012.7198	28636.281	24012.7198	28636.281
X Variable 1	2.54514756	0.213527756	11.9195163	3.1122E-07	2.06937807	3.02091704	2.06937807	3.02091704
Fixed Cost = Intercept	$ 26,324.50
Variable cost per unit	$          2.55	per pizza prepared
Equation: Cost = $26,324.50 + $2.55 x
R Square	93.42%
Yes, It has  the higher the R-squared, the better the model fits  to the data.