Steps for F-test
The Steps followed in the F-Test are as follows:(A) State the hypothesis:Ho: Relationship between Y and all Xs is not significant.HA: Relationship between Y and all Xs is significant(B) State the significant level: α = 5%(C) State the test statistics:F = r2 /K (1 – r2)/n-k-1(D) State the decision rule:
k = 1n-k-1 = 10α = 0.05Fc = 4.965Computation of F statistics:F = 0.565/1 (1-0.565)/(12 – 1 –1) = 12.989 Conclusion:
Since the computed F > Fc then we reject Ho. Therefore the relationship between the labour cost and the number of units is significant.