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# One of its costs is a mixed cost and has run a regression analysis

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Nelson Inc. believes one of its costs is a mixed cost and has run a regression analysis which shows the following:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.963711945
R Square 0.928740713
Standard Error 946.0983069
Observations 8

ANOVA
df SS MS F Significance F1
Regression 1 69996575.46 69996575 78.19955 0.000116235
Residual 6 5370612.038 00895102
Total 7 75367187.50

Coefficients Std Error T Stat P-Value
Intercept 11568.56 1352.39 8.554149 0.000140
X Variable 1 1.98 0.22390 8.843051 0.000116

Required:
1) Write the equation to predict estimated total mixed costs.
2) If 1,000 units are produced, what will total mixed costs?
3) What does the "R Square" number tell Nelson, Inc? Interpret the "R Square" data for Nelson, Inc.

#### Solution Preview

Thanks.

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Nelson Inc. believes one of its costs is a mixed cost and has run a regression analysis which shows the following:
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.963711945
R Square 0.928740713