Problem

Recent monthly costs of providing on-board flight service incurred by Great Plains Airline...

Recent monthly costs of providing on-board flight service incurred by Great Plains Airlines are shown in the following table.

Month

Number of Passengers

Cost of On-Board Flight Service

January

16,000

$18,000

February

17,000

18,000

March

16,000

19,000

April

18,000

20,000

May

15,000

18,000

June

17,000

19,000

Required:

1. Build aspreadsheet: Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior of the airline’s on-board flight service. Express the cost behavior in equation form.

2. Use Excel to calculate and interpret the R2 value for the regression.

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