Answer:
1. Lab's cost= 3187.94 +6.84 number of lab test performed
2. 0.77126
3. $24391.94
Explanation:
1.
The Lab's cost depends on the number of lab test performed. So, Lab's cost is a dependent variable while number of lab test is an independent variable. The linear regression equation is written as
Y= a+bx
Where,
y= dependent variable
x= independent variable
a= intercept
b= slope
So, the equation can be written as
Lab's cost= a+b number of lab test performed
From the Excel output we know that
Intercept = a= 3187.94
Slope= b =6.84
So, the required regression equation is
Lab's cost= 3187.94 +6.84 number of lab test performed
2.
The Excel output shows that R-square is 0.77126. R²=0.77126 means that only 77.13% of variation in Lab's cost is explained by its linear relationship with number of lab test performed.
3.
We have to predict the lab's cost for 3100 test.
We know that
Lab's cost= 3187.94 +6.84 number of lab test performed.
Here, number of lab test performed=3100.
So,
Lab's cost= 3187.94 +6.84(3100)
Lab's cost= 3187.94 +21204
Lab's cost=$24391.94
Thus, the predicted total laboratory overhead for the month if 3,100 tests are performed is $24391.94.
