Valle Crucis Corporation wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here): What is the cost equation based upon the results of the regression analysis?
A)y = $072x
B)y = $0.72x + $2,945.95
C)y = $2,945.95x + $0.72
D)y = $2,945.95 + $0.72

Question

Valle Crucis Corporation wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):  What is the cost equation based upon the results of the regression analysis?
A)y = $072x 
B)y = $0.72x + $2,945.95 
C)y = $2,945.95x + $0.72 
D)y = $2,945.95 + $0.72

Quizplus · Accepted Answer

Based on the results of the regression analysis, the cost equation is in the form of y = b + mx, where b is the intercept and m is the slope. In this case, the intercept is $2,945.95 and the slope is $0.72, so the equation is y = $0.72x + $2,945.95.

Valle Crucis Corporation Wanted to Determine the Relationship Between Its