Degen Company used least squares regression analysis to obtain the following output:
Payroll Department Cost
Explained by Number of Employees
$\begin{array}{lr}
\text { Constant } & \$ 7,540 \
\text { Standard error of } Y \text { estimate } & 819 \
\mathrm{r}^{2} & 0.8924 \
\text { Number of obærvations } & 20 \
\text { X coefficient(s) } & \$ 2.473 \
\text { Standard error of coefficient(s) } & 0.0966
\end{array}$ Required:
a.What is the total fixed cost?
b.What is the variable cost per employee?
c.Prepare the linear cost function.
d.What is the coefficient of determination? Comment on the goodness of fit.

Question

Degen Company used least squares regression analysis to obtain the following output:
 Payroll Department Cost
Explained by Number of Employees
$\begin{array}{lr}
\text { Constant } & \$ 7,540 \
\text { Standard error of } Y \text { estimate } & 819 \
\mathrm{r}^{2} & 0.8924 \
\text { Number of obærvations } & 20 \
\text { X coefficient(s) } & \$ 2.473 \
\text { Standard error of coefficient(s) } & 0.0966
\end{array}$ Required:
a.What is the total fixed cost?
b.What is the variable cost per employee?
c.Prepare the linear cost function.
d.What is the coefficient of determination? Comment on the goodness of fit.

Quizplus · Accepted Answer

The Answer of Degen Company used least squares regression analysis to obtain the following output:
 Payroll Department Cost
Explained by Number of Employees
$\begin{array}{lr}
\text { Constant } & \$ 7,540 \
\text { Standard error of } Y \text { estimate } & 819 \
\mathrm{r}^{2} & 0.8924 \
\text { Number of obærvations } & 20 \
\text { X coefficient(s) } & \$ 2.473 \
\text { Standard error of coefficient(s) } & 0.0966
\end{array}$ Required:
a.What is the total fixed cost?
b.What is the variable cost per employee?
c.Prepare the linear cost function.
d.What is the coefficient of determination? Comment on the goodness of fit.

Degen Company Used Least Squares Regression Analysis to Obtain the Following