Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Overhead Costs | Billable Hours |
395000 | 2000 |
440000 | 3000 |
460000 | 4000 |
513000 | 5000 |
580000 | 6000 |
605000 | 7000 |
Develop a simple linear regression model between billable hours and overhead costs.
Overhead
Costsequals=enter your response hereplus+left parenthesis nothing right parenthesisenter your response heretimes×Billable
Hours(Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.)
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Follow-up Questions
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Follow-up Question
Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm?
Interpret the fixed term,
b 0b0,
if appropriate. Choose the correct answer below.It is not appropriate to interpret
b 0b0,
because its value is the predicted billable hours for overhead costs of 0 dollars, but the firm cannot have overhead costs of 0 dollars associated with a client.The value of
b 0b0
is the predicted overhead costs for 0 billable hours.It is not appropriate to interpret
b 0b0,
because its value is the predicted overhead costs for 0 billable hours, but someone with 0 billable hours would not actually be a client of the firm.For each increase of 1 unit in billable hours, the predicted overhead costs are estimated to increase by
b 0b0.
The value of
b 0b0
is the predicted billable hours for an overhead cost of 0 dollars.For each increase of 1 unit in overhead costs, the predicted billable hours are estimated to increase by
b 0b0.
Solution
by Bartleby Expert
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm?
Interpret the fixed term,
b 0b0,
if appropriate. Choose the correct answer below.It is not appropriate to interpret
b 0b0,
because its value is the predicted billable hours for overhead costs of 0 dollars, but the firm cannot have overhead costs of 0 dollars associated with a client.The value of
b 0b0
is the predicted overhead costs for 0 billable hours.It is not appropriate to interpret
b 0b0,
because its value is the predicted overhead costs for 0 billable hours, but someone with 0 billable hours would not actually be a client of the firm.For each increase of 1 unit in billable hours, the predicted overhead costs are estimated to increase by
b 0b0.
The value of
b 0b0
is the predicted billable hours for an overhead cost of 0 dollars.For each increase of 1 unit in overhead costs, the predicted billable hours are estimated to increase by
b 0b0.
Solution
by Bartleby Expert
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