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Clough Company Is Interested in Establishing the Relationship Between Utility

Question 118

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Clough Company is interested in establishing the relationship between utility costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow:
 Month  Machine  Electricity  Hours  Costs  January 3,25022,080 February 3,77025,200 March 2,47016,200 April 4,03027,600 May 4,94033,900 June 4,29026,400 July 5,33029,700 August 4,56027,300 September 2,60018,600 October 4,81031,200 Nowember 6,11037,200 December 5,46033,300\begin{array}{|l|r|r|}\hline \text { Month } & \text { Machine } & \text { Electricity } \\& \text { Hours } & \text { Costs } \\\hline \text { January } & 3,250 & 22,080 \\\hline \text { February } & 3,770 & 25,200 \\\hline \text { March } & 2,470 & 16,200 \\\hline \text { April } & 4,030 & 27,600 \\\hline \text { May } & 4,940 & 33,900 \\\hline \text { June } & 4,290 & 26,400 \\\hline \text { July } & 5,330 & 29,700 \\\hline \text { August } & 4,560 & 27,300 \\\hline \text { September } & 2,600 & 18,600 \\\hline \text { October } & 4,810 & 31,200 \\\hline \text { Nowember } & 6,110 & 37,200 \\\hline \text { December } & 5,460 & 33,300 \\\hline\end{array}

Clough Company is interested in establishing the relationship between utility costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow: \begin{array}{|l|r|r|} \hline \text { Month } & \text { Machine } & \text { Electricity } \\ & \text { Hours } & \text { Costs } \\ \hline \text { January } & 3,250 & 22,080 \\ \hline \text { February } & 3,770 & 25,200 \\ \hline \text { March } & 2,470 & 16,200 \\ \hline \text { April } & 4,030 & 27,600 \\ \hline \text { May } & 4,940 & 33,900 \\ \hline \text { June } & 4,290 & 26,400 \\ \hline \text { July } & 5,330 & 29,700 \\ \hline \text { August } & 4,560 & 27,300 \\ \hline \text { September } & 2,600 & 18,600 \\ \hline \text { October } & 4,810 & 31,200 \\ \hline \text { Nowember } & 6,110 & 37,200 \\ \hline \text { December } & 5,460 & 33,300 \\ \hline \end{array} Required: (a. )What is the equation for utility costs using the regression analysis? (b. )Does the variable machine hours have statistical significance? Explain.(c. )Prepare an estimate of utility costs for a month when 3,000 machine hours are worked.
Required:
(a. )What is the equation for utility costs using the regression analysis?
(b. )Does the variable "machine hours" have statistical significance? Explain.(c. )Prepare an estimate of utility costs for a month when 3,000 machine hours are worked.

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(a. )$4,472.26 + $5.329 × mac...

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