Question

Method of Least Squares, Goodness of Fit

Deepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the radiological tests would be primarily fixed, but she found that costs increased with the number of tests performed. Costs for this service over the past nine months are as follows:

Month   Radiology Tests   Total Cost
January   2,800   $133,500
February   2,600   135,060
March   3,100   175,000
April   3,500   170,600
May   3,400   176,900
June   3,700   186,600
July   3,840   174,450
August   4,100   195,510
September   3,450   185,300
Required:

1. Compute the cost formula for radiology services using the method of least squares. If required, round your answers to two decimal places.

Y   =   $fill in the blank 1
+   $fill in the blank 2
X
2. Using the formula computed in Requirement 1, what is the predicted cost of radiology services for October for 3,500 appointments? (Round the answer to the nearest dollar.)

$fill in the blank 3

Answer 1

ANSWER:

Regression equation is given by:

Feel free to ask any clarification, if required. Kindly provide feedback by thumbs up, if satisfied. It will be highly appreciated.
Thank you.