Question

The following computer printout estimated overhead costs using multiple regression: t for H(O) Std. error Parameter Pr>t of parameter Estimate 1000 Parameter = 0 1.96 Intercept 0.0250 510.204 Setup hours 25 81.96 0.0001 0.305 # of parts 100 9.50 0.0001 10.527 0.94 R Square (R2) Standard Error (Se) Observations 75.00 160 During the year the company used 1,000 setup hours and 500 parts. What is the predicted overhead cost? $2,500 $75,000 $76,000 none of these

Answer 1

solution: the company used 1000 During the year hours and 500 parts The predicted overhead cost & y= Bot B x 1000 + x 500 = 1000 + 25 X 1000 + 100x500 = 1000 + 25000 + 50000 = $ 76000 Option 3' is correct