Question

Question One (a) A factory producing timber in Katete assumes that the cost of output at their factory S pa on the number of units produced. Since this is a new factory, data has only been gathered to months as presented in the schedule below Month January February March April May June Output (Quantities) 4000 6000 2000 8000 6000 10000 Cost of Production (K) 18,000 22,000 14,000 26,000 22,000 30,000 You are asked to: Plot the scatter diagram for the output and costs (5 Marks) Assess the correlation between output and cost (5 Marks) Interpret the coefficient of determination. (5 Marks)

Answer 1

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ESSE Book1 - Excel File Home Insert Page Layout Formulas Data Review View Help Tell me what you want to do Cut Calibri -11 Á A === On a Wrap Text General LE Copy Paste BIU - D- DA SS Format Painter € Merge & Center - . % Clipboard Font Alignment Number A UPDATES AVAILABLE Updates for Office are ready to be installed, but first we need to close some apps. Update now | General - 1 5 Conditional Format as Ce Formatting Table Style Styles N22 G H I M N A B C D E F 1 Output (x) Cost of producton (y) xy x ^2 y^2 4000 18000 72000000 16000000 324000000 6000 22000 132000000 36000000 484000000 2000 14000 28000000 4000000 196000000 8000 26000 208000000 64000000 676000000 6000 22000 132000000 36000000 484000000 10000 30000 300000000 100000000 900000000 36000 132000 872000000 256000000 3064000000 J K L (ii) From the table it is clear, that there is a positive linear correlation between output and cost of production RE 0.108394 0.011749 R^2= Cost of producton (y) 35000 For calculation of coefficient of determination, we use the formula, n(2xy)-(2x)(2y) 13 30000 r= Jin£r? - x)2][n {y2 - (Ey)2] 14 25000 15 20000 15000 10000 2000 4000 8000 10000 12000 6000 Output