Burmer Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. Data regarding the machine hours and maintenance costs for the last year and the results of the regression analysis are as follows:A staff assistant has run regression analyses on the data and obtained the following output using Excel:
REGRESSION ANALYSIS
Y (Dependent) Variable: Maintenance Cost
X (Independent) Variable: Maintenance Hours
A key statistic that indicates reliability of the regression is:
A) 12.
B) 47.0630.
C) 0.9964.
D) 783.338.
E) 6.777.

Question

Burmer Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. Data regarding the machine hours and maintenance costs for the last year and the results of the regression analysis are as follows:A staff assistant has run regression analyses on the data and obtained the following output using Excel:
REGRESSION ANALYSIS
Y (Dependent) Variable: Maintenance Cost
X (Independent) Variable: Maintenance Hours
A key statistic that indicates reliability of the regression is:
A) 12. 
B) 47.0630. 
C) 0.9964. 
D) 783.338. 
E) 6.777.

Quizplus · Accepted Answer

The key statistic that indicates reliability of the regression is the R-squared value. In this case, the R-squared value is 0.9964, which means that 99.64% of the variation in maintenance costs can be explained by the variation in maintenance hours. This indicates a strong and reliable relationship between the two variables.

Burmer Co Has Accumulated Data to Use in Preparing Its Annual