Month Utility Cost Labor Hours Machine Hours

Jan $2,527 4,150 2,500

Feb 2,515 4,000 2,375
Mar 2,654 4,360 2,600
Apr 2,593 4,200 2,450
May 2,455 4,050 2,525
June 2,509 4,100 2,410
July 2,557 4,275 2,720
Aug 2,588 4,250 2,525
Sept 2,540 4,050 2,350
Oct 2,707 4,500 2,610
Nov 2,731 4,600 2,700
Dec 2,697 4,375 2,675
Total 31,073 50,910 30,440

3.) Multiple Regression Labor Hours Machine Hours

R Square 0.91 0.87 0.42
Standard Error 29.96 33.32 71.21
Significance F 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 SS MS F Significance F
Regression 2 79014.93 39507.46 44.02 0
Residual 9 8077.99 897.55
Total 11 87092.92

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

Residual Plot
RESIDUAL OUTPUT 70
60
ObservationPredicted Utility Cost
Residuals 50
1 2545.58 -18.58
2 2489.17 25.83 40
3 2641.35 12.65 30
4 2584.91 8.09 20
5 2483.72 -28.72
10
6 2537.6 -28.6
7 2566.66 -9.66 0
8 2596.25 -8.25 -10
9 2522.9 17.1 -20
10 2717.87 -10.87
-30
11 2753.99 -22.99
2450 2500 2550 2600 2650 2700 2750 2800
12 2632.99 64.01
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 SS MS F Significance F
Regression 1 75987.79 75987.79 68.43 0
Residual 10 11105.13 1110.51
Total 11 87092.92

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 SS MS F Significance F
Regression 1 36379.01 36379.01 7.17 0.02
Residual 10 50713.91 5071.39
Total 11 87092.92

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