Duke Corporation uses least-squares regression to analyze a variety of operating costs. A staff assistant determined that monthly machine hours (MH) have a strong cause-and-effect relationship with total maintenance costs, and generated the following statistics: Intercept: $170,000 b coefficient: $3.80 Total machine hours for the year: 36,500Required: A. Construct the company's regression equation.B. Based on your answer in part "A," identify Duke's dependent variable and independent variable.C. What does the b coefficient really represent?D. Predict the company's maintenance cost in a month when 3,200 machine hours are worked.
What will be an ideal response?
A. Y = $170,000 + $3.80MH
B. Y (total maintenance cost) is the dependent variable; MH (machine hours) is the independent variable.
C. The b coefficient represents both the slope of the regression line and the variable maintenance cost per machine hour.
D. Y = $170,000 + $3.80MH
Y = $170,000 + ($3.80 × 3,200)
Y = $182,160
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