Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen

تمرين 36

CONSTRUCTING A CONFIDENCE INTERVAL USING REGRESSION RESULTS
Suenos Manufacturing Company, using 12 months of data on purchasing cost and number of purchase orders, ran a regression equation that yielded the following information on the intercept, X variable 1, and standard error. (All regression results have been rounded to the nearest cent.)

Suenos Manufacturing Company estimates that 430 purchase orders will be processed next month and wants to know the interval into which the actual value will fall with a 95 percent confidence level. (A table of selected values of the t Distribution is found in Exhibit 3-14.)
Required:
1. Determine the appropriate t-statistic value from Exhibit 3-14 for constructing Suenos Manufacturing Company's confidence interval.
2. Suenos Manufacturing Company estimates that next month will have 430 purchase orders. Construct a 95 percent confidence interval around the predicted value for materials handling cost. (Round the confidence interval answers to the nearest dollar.)
3. What if Suenos Manufacturing wanted a 90 percent confidence level?Will the confidence interval be larger or smaller than the one calculated in Requirement 2? Construct a 90 percent confidence interval. (Round the confidence interval answers to the nearest dollar.)