Question

Interpreting Regression OutputRikki Bake, the controller for XYZ Incorporated, suspects that factory overhead costs are driven by the number of machine hours used. Using Excel, Ms. Bake input twelve months of historical data for total factory overhead costs and machine hours used. The summary output information is provided below. Use the output information provided to develop a cost formula for overhead cost.Complete the formula below. Round answers to two decimal places.Overhead Cost = $_______ + ( $_______ x machine hours)

Answer 1

Overhead Cost = $ 970.12 + ( $ 36.14 x machine hours)

Step-by-step explanation:

From the summary output, we have, coefficients for:

Intercept = $970.12

Machine hours = 36.138 or 36.14 (rounded to 2 decimals)

Hence, the cost equation is:

Overhead Cost =$ 970.12 )+($ 36.14 x machine hours)