A regression analysis of total labor costs (y) based upon the number of visitors (x) for the Wacky World Theme Park, yielded a coefficient of $2.75. The t statistic was t=6.141 and the R2=.921. Based upon those results, we can conclude
A) The cost driver rate is $2.75 and statistically significant
B) Visitors cause all labor costs
C) The relationship between the t-statistic and the R2 is weak
D) All of the above

Question

Quizplus · Accepted Answer

The coefficient of $2.75 indicates the cost driver rate, and the t statistic of 6.141, which is significantly high, suggests that this coefficient is statistically significant. The R^2 value indicates the proportion of variance in the dependent variable that can be explained by the independent variable, but it does not directly relate to the t-statistic's strength or significance. Choices B and C are incorrect interpretations of the given statistics.

A Regression Analysis of Total Labor Costs (Y) Based Upon