Month

Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Total
3.)
R Square
Standard Error
Significance F

Utility Cost
$2,527
2,515
2,654
2,593
2,455
2,509
2,557
2,588
2,540
2,707
2,731
2,697
31,073

Labor Hours Machine Hours
4,150
2,500
4,000
2,375
4,360
2,600
4,200
2,450
4,050
2,525
4,100
2,410
4,275
2,720
4,250
2,525
4,050
2,350
4,500
2,610
4,600
2,700
4,375
2,675
50,910
30,440

Multiple Regression Labor Hours Machine Hours
0.91
0.87
0.42
29.96
33.32
71.21
0
0
0.02

4.) The best cost driver would have to be the set between labor and machine hours. The multiple regression has the highest R square and the
residuals show no sign of being part of a pattern, which tells me that the data is good. Standard Error for the multiple regression is also the lowest
of the three, showing that it has the smallest distance between points. Despite the fact that the significance f is not the lowest on the multiple
regression it is still very low and shows that the multiple regression between labor and machine hours would be the best choice for the data to
explain what the real cost driver is.

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.95
R Square
0.91
Adjusted R Square
0.89
Standard Error
29.96
Observations
12
ANOVA
df
Regression
Residual
Total

Intercept
Labor Hours
Machine Hours

SS
MS
2 79014.93 39507.46
9 8077.99
897.55
11 87092.92

F
Significance F
44.02
0

Coefficients
Standard Error t Stat
P-value
Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
770.4
205.72
3.74
0
305.03 1235.76
305.03 1235.76
0.56
0.08
6.89
0
0.38
0.75
0.38
0.75
-0.22
0.12
-1.84
0.1
-0.5
0.05
-0.5
0.05

Residual Plot
RESIDUAL OUTPUT
ObservationPredicted Utility Cost
Residuals
1 2545.58
-18.58
2 2489.17
25.83
3 2641.35
12.65
4 2584.91
8.09
5 2483.72
-28.72
6
2537.6
-28.6
7 2566.66
-9.66
8 2596.25
-8.25
9
2522.9
17.1
10 2717.87
-10.87
11 2753.99
-22.99
12 2632.99
64.01

70
60
50
40
30
20
10
0
-10
-20
-30
2450

2500

2550

2600

2650

2700

2750

2800

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.93
R Square
0.87
Adjusted R Square
0.86
Standard Error 33.32
Observations
12
ANOVA
df
Regression
Residual
Total

SS
MS
1 75987.79 75987.79
10 11105.13 1110.51
11 87092.92

F
Significance F
68.43
0

Coefficients
Standard Error t Stat
P-value
Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept
717.17
226.54
3.17
0.01
212.4 1221.93
212.4 1221.93
Labor Hours
0.44
0.05
8.27
0
0.32
0.56
0.32
0.56

RESIDUAL OUTPUT
Observation
Predicted Utility Cost
Residuals
1
2548.6
-21.6
2
2482.4
32.6
3 2641.27
12.73
4 2570.66
22.34
5 2504.46
-49.46
6 2526.53
-17.53
7 2603.76
-46.76
8 2592.73
-4.73
9 2504.46
35.54
10 2703.05
3.95
11 2747.18
-16.18
12 2647.89
49.11

Upper 95.0%

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.65
R Square
0.42
Adjusted R Square
0.36
Standard Error 71.21
Observations
12
ANOVA
df
Regression
Residual
Total

SS
MS
1 36379.01 36379.01
10 50713.91 5071.39
11 87092.92

F

Significance F
7.17
0.02

Coefficients
Standard Error t Stat
P-value Lower 95%Upper 95%Lower 95.0%
Upper 95.0%
Intercept
1432.74
432.36
3.31
0.01
469.39 2396.09
469.39 2396.09
Machine Hours 0.46
0.17
2.68
0.02
0.08
0.84
0.08
0.84

RESIDUAL OUTPUT
Observation
Predicted Utility Cost
Residuals
1
2572.7
-45.7
2
2515.7
-0.7
3
2618.3
35.7
4
2549.9
43.1
5
2584.1
-129.1
6 2531.66
-22.66
7 2673.01
-116.01
8
2584.1
3.9
9
2504.3
35.7
10 2622.86
84.14
11 2663.89
67.11
12 2652.49
44.51