The New Cost Analyst in Your Accounting Department Has Just

Essay

The new cost analyst in your accounting department has just received a computer-generated report that contains the results of a simple regression program for cost estimation.The summary results of the report appear as follows:
$\begin{array}{lrrr}\text { Variable }& \text { Coefficient } & \text { Standard Error } & \text { t-Value }\\\text { Constant } & \$ 74.79 & \$ 16.82 & 4.45 \\\text { Independent variable } & \$ 1,081.76 & \$ 215.67 & 5.02\\r62=0.75\end{array}$ Required:
a.What is the cost estimation equation according to the report?
b.What is the goodness of fit? What does it tell about the estimating equation?