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Question - James is trying to determine if there is a relationship between machine hours and utility costs. He has gathered financial information from the last six months as follows:
Month Machine Hours Utility Costs
1 2000 900
2 2800 1420
3 3200 1200
4 3000 1200
5 2200 1300
6 2400 1000
Required:
A. Using either the high-low method or regression analysis, determine the equation for a line. (Note: You will receive 5 extra credit points if you use regression analysis.)
B. James believes that in month 7 the machine hour volume will be 3600 hours. Determine the expected utility cost.
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