Brewsky's Is a Chain of Micro-Breweries -
What Is the Percent of the Total Variance That

Brewsky's is a chain of micro-breweries. Managers are interested in the costs of the stores and believe that the costs can be explained in large part by the number of customers patronizing the stores. Monthly data regarding customer visits and costs for the preceding year for one of the stores have been entered into the regression analysis and the analysis is as follows:
$\begin{array}{llr} \text { Average monthly customer visits } &&1,462\\ \text { Average monthly total costs } &&\$4,629\\& \text { Regression Results} &\\ \text { Intercept } &&\$1,496\\ \text { b coefficient } &&\$2.08\\ \text { R }^{2} &&0.86814\\\end{array}$

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What is the percent of the total variance that can be explained by the regression equation? (CMA adapted)

A) 86.8%
B) 31.6%
C) 97.7%
D) 71.9%

Correct Answer:

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