George's Ice Cream Shop believes most of its utilities costs are mixed. George has collected the following data on gallons of ice cream used and related utilities costs for the past six months: George has run a regression analysis on the above information and has come up with the following data:
Using regression analysis, which of the following formulas would be the best predictor of total estimated mixed costs?
A) Y = $300 + $20x
B) Y = $329.50 + $19.57x
C) Y = $900 + $30x
D) Y = $19.56 + $329.50x

Question

George's Ice Cream Shop believes most of its utilities costs are mixed. George has collected the following data on gallons of ice cream used and related utilities costs for the past six months:  George has run a regression analysis on the above information and has come up with the following data:
 Using regression analysis, which of the following formulas would be the best predictor of total estimated mixed costs?
A) Y = $300 + $20x 
B) Y = $329.50 + $19.57x 
C) Y = $900 + $30x 
D) Y = $19.56 + $329.50x

Quizplus · Accepted Answer

Based on the regression analysis equation, the Y-intercept is $329.50 and the slope is $19.57, which means that for every additional gallon of ice cream, the estimated mixed costs increase by $19.57. Therefore, the formula Y = $329.50 + $19.57x would be the best predictor of total estimated mixed costs.

George's Ice Cream Shop Believes Most of Its Utilities Costs