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:
Variable Coefficient Standard Error t-Value
Constant $35.92 $16.02 2.24
Independent variable $563.80 $205.40 2.74
r2 = 0.75
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?