Question

Suy The Business School at Easter College la collecting data as a first step in the preparation of next year's budget. One cost that is being looked at closely in administrative staff as a function of student cro hours. Data on administrative costs and credit hours for the most recent 13 months follow M Administrative Costa Credit Hours $ 543,064 525 August 346.975 242 September 950,036 2,923 October 908,855 2,100 November 1,084,705 2.749 December 774 M January 920,375 2,812 February 1,029,000 2.883 2234 April 2,368 May 1.049,900 June 715,756 882 July 538,301 662 Total S 10.558,242 25,561 Average $ 812,172 2.395 Mard 180.406 BOBOS 2.85 The controllere ople has analyzed the data and given you the results from the regression analysis: SUMMARY OUTPUT Regressions Multiple R 0.93338922 Rare 0.371215436 Adjusted RSquare 0850507740 Standard Em 83810.54742 Observations 13 ANOVA SS 5.2200011 77206209442 5.00005E11 Regression Residual Tota 74 4130033 MS 5.227E+11 702420738 Significance 3.16774E06 1 11 12 Interop Crous Coins 404874531 207.1465552 Standard Emo 5262728522 24.0132254 TS 7.69324371 8.62636284 p-value 9.4548E-06 3.1677E-00 Lower 95% 289042.6573 154.2931025 Upper 520705 4047 259 9993079

Answer 1

L M A B С D E F G H 1 j K 1 d) 2 Month Credit Hours Administrative Costs 3 Highest Activity Level September 2,923 960,036 4 Lowest Activity Level August 242 346,975 5 6 Variable cost per credi $ 229 (Highest administrative cost - Lowest administrative cost)/(Highest credit hours - Lowest credit hours) 7 8 Fixed cost $ 291,637 Highest administrative cost - (Variable cost per credit hour * Highest credit hours) 9 10 Cost equation = Fixed cost +(Variable cost per credit hour * Credit hours) = $291,637 +($229 * Credit hours) 12 13 e) 14 Regression analysis estimated administrative cost equation = $404,874.531 +($207.1465552 * Credit hours) 15 Estimated administrative cost with 2,100 credit hours 16 = $404,875 +($207 * 2,100) (intermediate calculations rounded off to nearest whole dollar value) 17 = $404,875 + $434,700 18 = $839,575 11 19 20 f) 21 R Square 22 R 23 24 0.87121544 0.933 The % of total variance explained by the regression = R Square = 0.871 or 87.1%