An accountant wishes to predict direct labor cost (y) on the basis of the batch

Question

An accountant wishes to predict direct labor cost (y) on the basis of the batch size (x) of a product produced in a job shop. Data for 12 production runs are given in the table below, along with the Excel output from fitting a least squares regression line to the data. Direct Labor Cost Data Direct Labor Cost. y (S100s) Batch Size, x 663 381 138 861 35 12 493 46 52 100 75 251 435 772 Batch Size Line Fit Plot 1000 +LaborCost 18.488+ 10.146 BSize 800 600 400 200 Batch Size (a) Find bi and Do. (Provide your answers to 3 decimals places.) 18.488 (b) Interpret the meanings of b and by. Does the interpretation of bo make practical sense? bis the estimated b is the estimated batch size ncrease when( mean labor cost = 0; no in mean labor cost for every 1 unit increase in batch size (c) Wite the least squares prediction equation. (Answers to 3 decimal places.) 18.488 10.148 x (d) Use the least squares line to obtain a point estimate of the mean direct labor cost for all batches of size 60 and a point prediction of the direct labor cost for an individual batch of size 60. (Round your answer to 3 decimal places.) 3(60)-6272468 hundreds of dollars.

Explanation / Answer

b0=18.488
b0=10.146
b0 is the estimated mean labour cost whne the batch size =0 ;yes
b1 is the estimated increase for every 1 unit os increase in batch size
c)Y=18.488+10.146x
d)when x=60
=18.488+(10.146*60)
=627.248

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