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The Pacioli Manufacturing Company Has Kept Track of the Number

Question 40

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The Pacioli Manufacturing Company has kept track of the number of units they have produced each month and the cost to produce those units for the past 6 months. Using regression determine the cost estimation equation and the R2 for the equation.If Pacioli expects to produce 14,000 units in January what cost should Pacioli budget for? How does the R2 help when forecasting cost and what impact does this R2 have on this estimate?
The Pacioli Manufacturing Company has kept track of the number of units they have produced each month and the cost to produce those units for the past 6 months. Using regression determine the cost estimation equation and the R<sup>2</sup> for the equation.If Pacioli expects to produce 14,000 units in January what cost should Pacioli budget for? How does the R<sup>2</sup> help when forecasting cost and what impact does this R<sup>2</sup> have on this estimate?

Correct Answer:

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Slope = $5.04
Intercept = $9,897
R2 = .99...

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