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:
The F statistic is calculated by:
A)Determining the square root of sum of squares for the regression.
B)Using the square root of both the sum of squares and mean sum of squares for the regression.
C)Using the mean sum of squares of the regression and mean sum of squares for the errors.
D)Using the sum of squares for the errors and the square root of the sum of squares for the regression. F = Mean sum of squares/mean square error

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: 
The F statistic is calculated by:
A)Determining the square root of sum of squares for the regression. 
B)Using the square root of both the sum of squares and mean sum of squares for the regression. 
C)Using the mean sum of squares of the regression and mean sum of squares for the errors. 
D)Using the sum of squares for the errors and the square root of the sum of squares for the regression. F = Mean sum of squares/mean square error

Quizplus · Accepted Answer

The F statistic is calculated by dividing the mean sum of squares for the regression by the mean sum of squares for the errors. Option A is incorrect as it incorrectly suggests taking the square root of the sum of squares for the regression. Option B is incorrect as it suggests taking the square root of both the sum of squares and mean sum of squares, which is not the correct formula for F. Option D is incorrect as it suggests using the sum of squares for the errors instead of the mean sum of squares for the errors.

Burmer CoHas Accumulated Data to Use in Preparing Its Annual Profit