Determine if there is a relationship between machine hours and utility costs using the following information.
|
Month
|
Machine Hours
|
Utility Costs
|
|
1
|
2000
|
900
|
|
2
|
2800
|
1420
|
|
3
|
3200
|
1200
|
|
4
|
3000
|
1200
|
|
5
|
2200
|
1300
|
|
6
|
2400
|
1000
|
A. Using either the high-low method or regression analysis, determine the equation for a line.
B. An accountant believes that in month 7 the machine hour volume will be 3600 hours. Determine the expected utility cost.
C. Do you think machine hours is a good predictor of utility costs? Why?