Photon Dynamics has run two simple regressions and one multiple regression to es

Question

Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Simple regressiom

(units)

Simple regression

(machine hours)

Multiple regression

(both variables)

Using the best cost estimation model determine the estimated FOH costs if Photon expects to produce 300 units and use 50 m/c hours?

Question 16 options:

$3,750

$3,985

$2,691

$4,760

Item

Simple regressiom

(units)

Simple regression

(machine hours)

Multiple regression

(both variables)

Intercept $3,000 $2,600 $3,200 R2 0.89 0.67 0.92 Coefficient/slope $2.50 $1.82 $1.80 (units) $4.90 (machine hours)

Explanation / Answer

Item Simple regressiom Simple regression Multiple regression (units) (machine hours) (both variables) Intercept $3,000 $2,600 $3,200 R2 0.89 0.67 0.92 Coefficient/slope $2.50 $1.82 $1.80 (units) $4.90 (machine hours) Expected Units                  300 Expected m/c hrs                     50 Estimated FOH cost under multiple regreesion with both varibles; = 3200+1.8*300+4.9*50 = $    3,985.00 So estimated FOH =$3,985

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