Question

The finance director at Ubuntu University of Science and Technology is concerned about the overhead costs at her university. Cost pressures are severe and so controlling and reducing overheads is very important. The director believes overhead costs incurred are generally a function of the number of different academic programmes, and the number of enrolled students. The following data has since been collected for analysis:

year	Overhead Costs	Number of Academic Programmes	Number of Enrolled Students
1	$13 500	29	3 400
2	19 200	36	5 000
3	16 800	49	2 600
4	20 100	53	4 700
5	19 500	54	3 900
6	23 100	58	4 900
7	23 700	88	5 700
8	20100	72	3 900
9	22 800	83	3 500
10	29 700	73	3 700
11	31 200	101	5 600
12	38100	103	7 600

Required

a) Using the above data, estimate the regression line

. b) Calculate the coefficient of determination.

c) What insights do the analyses provide about controlling and reducing overhead costs at the university?

Answer 1