Question

The following information on maintenance and repair costs and revenues for the last two years is available from the accounting records at Arnie’s Arcade & Video Palace. Arnie has asked you to help him understand the relation between business volume and maintenance and repair cost.

Month	Maintenance and Repair Cost ($000)	Revenues ($000)
July	$2.16	$56.00
August	3.13	50.00
September	2.65	46.00
October	2.06	62.00
November	2.15	74.00
December	0.99	102.00
January	2.97	42.00
February	3.01	48.00
March	2.87	58.00
April	2.83	60.00
May	1.89	64.00
June	1.63	76.00
July	2.45	70.00
August	1.87	64.00
September	2.42	72.00
October	2.23	74.00
November	1.28	84.00
December	0.61	114.00
January	2.43	58.00
February	2.13	60.00
March	1.54	80.00
April	1.80	84.00
May	1.80	70.00
June	1.42	66.00

Required:

Using Excel, estimate a linear regression with maintenance and repair cost as the dependent variable and revenue as the independent variable. (Negative amounts should be indicated by a minus sign. Round "Multiple R, R Square and Standard Error" to 7 decimal places, "Intercept and Revenues" to 4 decimal places.)

	Regression Statistics Multiple R R Square Standard Error Observations Coefficients.    Intercept Revenues.

Answer 1

Requirements 1

Regression Statistics
Multiple R	0.86175177
R Square	0.7426161
Adjusted R Square	0.73091685
Standard Error	0.339151996
Observations	24

Requirement 2

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	4.375712495	0.294313407	14.86753	5.87E-13	3.765344	4.986081	3.765344	4.986081
Revenue	-0.033474357	0.004201549	-7.96715	6.32E-08	-0.04219	-0.02476	-0.04219	-0.02476

Additional

ANOVA
	df	SS	MS	F	Significance F
Regression	1	7.301203659	7.301204	63.47544	6.32E-08
Residual	22	2.530529674	0.115024
Total	23	9.831733333