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An accountant wishes to predict labor cost (yxDirect labor cost Batch Size663 62381 35) on the basis of batch size () of a product produced in a job shop. Data for 12 production runs include:
71 5
138 12
861 83
145 14
493 46
548 52
251 23
1024 100
435 41
772 1
Q1. Use your results to solve for and interpret the following:
a) What is the point estimate of the mean square error σ2?
b) What is the point estimate of the standard error σ?
c) Interpret the confidence interval for the slope coefficient. How can we use this information to determine whether we should reject or fail to reject the null hypothesis that there is no effect?
d) What is the coefficient of determination?
e) Finally, is the "model" statistically significant based on the F-test?
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