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Lakeway Enterprises
Regression Analysis Case
Georganna Russell, the controller of Lakeway Enterprises, a fabricator specializing in the manufacture of copper pipe, has undertaken a project to study the behavior of overhead cost. She has assembled data for this month from each of the firm's twenty-eight manufacturing facilities. In addition, all the allocated components of the factory overhead account, such as head office costs, have been eliminated from the factory overhead account balances.
Georganna has asked you to develop a regression model to predict the level of manufacturing overhead based on the data in Table 1.
Required:
You are touse the Excel computer program and include the printout for all regression models considered.
Table 1: Lakeway Enterprises
Plant Number
Factory Overhead
Labor Hours
Machine Hours
Tons of Raw Material Handled
Production Line Setups
1
137,896
2,092
959
414
67
2
174,342
1,617
1,227
623
88
3
168,896
2,215
1,351
437
50
4
178,059
1,584
1,480
479
89
166,605
1,930
952
678
52
165,320
1,717
986
666
7
157,585
2,319
931
585
75
8
165,667
2,312
1,439
90
9
155,657
1,880
945
619
94
10
144,605
1,723
869
489
60
11
157,608
1,992
1,171
445
56
12
171,700
2,476
1,228
581
13
140,686
2,087
928
446
61
14
171,982
2,256
950
688
99
15
155,252
2,179
1,016
580
78
16
140,793
1,806
902
464
17
154,377
1,671
948
610
18
150,886
2,019
1,130
532
19
159,198
1,585
1,335
415
98
20
145,379
1,747
1,052
517
91
21
152,614
1,618
860
640
64
22
159,450
2,122
1,188
548
23
160,983
1,697
1,254
425
24
175,393
2,406
1,187
695
58
25
153,031
1,917
468
97
26
166,110
1,658
1,015
660
74
27
150,041
2,042
971
478
51
28
170,419
1,757
1,111
652
85
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