European engine company, The European Engine Company (EEC)

European engine company

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Reference no: EM137102

The European Engine Company (EEC) is a multi-national manufacturer of small gasoline and diesel motors. EEC has predicted the given cost experience for a new 3.5 hp engine over a sample of 122 observations:

COST = $8,500 + $32 OUTPUT

Predictor Coef Stdev t ratio
Constant 8,500 5,000 1.7
OUTPUT 32 8 4.0

SEE = $2,500 R2 = 75% = 74.8% F statistic = 360

where COST is the dependent Y variable and OUTPUT is the independent X-variable.

A. Fully deduce these effortless regression results.

B. illustrates this cost grouping as fixed / variable based upon the simple regression results described previously.

Reference no: EM137102

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