Louis Katz,a cost accountant at Papalote Plastics,Inc.(PPI),is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI.Louis's independent variable is production lot size (in 1,000's of units),and his dependent variable is the total cost of the lot (in $100's).Regression analysis of the data yielded the following tables.
Using $\alpha$ = 0.05,Louis should ________________.
A)increase the sample size
B)suspend judgment
C)not reject H0: $\beta$1 = 0
D)reject H0: $\beta$1 = 0
E)do not reject H0: $\beta$0 = 0

Question

Louis Katz,a cost accountant at Papalote Plastics,Inc.(PPI),is analyzing the manufacturing costs of a molded plastic telephone handset produced by PPI.Louis's independent variable is production lot size (in 1,000's of units),and his dependent variable is the total cost of the lot (in $100's).Regression analysis of the data yielded the following tables.  
 Using $\alpha$ = 0.05,Louis should ________________.
A)increase the sample size 
B)suspend judgment 
C)not reject H0: $\beta$1 = 0 
D)reject H0: $\beta$1 = 0 
E)do not reject H0: $\beta$0 = 0

Quizplus · Accepted Answer

With a significance level of 0.05, we reject the null hypothesis (H0: β1 = 0) if the calculated F-statistic is greater than the critical value. In this case, the calculated F-statistic is 5.59, which is greater than the critical value of 4.10. Thus, we reject the null hypothesis and conclude that there is a significant linear relationship between production lot size and total cost of the lot. Therefore, Louis should reject H0: β1 = 0.

Louis Katz,a Cost Accountant at Papalote Plastics,Inc α\alphaα = 005,Louis Should ________________

Louis Katz,a Cost Accountant at Papalote Plastics,Inc $\alpha$ = 005,Louis Should ________________