Question

The following information on maintenance and repair costs and revenues for the last two years is available from the accounting records at Arnie’s Arcade & Video Palace. Arnie has asked you to help him understand the relation between business volume and maintenance and repair cost.

Month	Maintenance and Repair Cost ($000)	Revenues ($000)
July	$2.01	$53.00
August	2.98	47.00
September	2.50	43.00
October	1.91	59.00
November	2.00	71.00
December	0.84	99.00
January	2.82	39.00
February	2.86	45.00
March	2.72	55.00
April	2.68	57.00
May	1.74	61.00
June	1.48	73.00
July	2.30	67.00
August	1.72	61.00
September	2.27	69.00
October	2.08	71.00
November	1.13	81.00
December	0.46	111.00
January	2.28	55.00
February	1.98	57.00
March	1.39	77.00
April	1.65	81.00
May	1.65	67.00
June	1.51	63.00

Required:

Using Excel, estimate a linear regression with maintenance and repair cost as the dependent variable and revenue as the independent variable. (Negative amounts should be indicated by a minus sign. Round "Multiple R, R square and Standard Error" to 7 decimal places, Intercept and Revenues to 4 decimal places.)

REGRESSION STATISTICS
   MULTIPLE R ?
   R SQUARE    ?
   STANDARD ERROR    ?
   OBSERVATIONS    ?
   COEFFICIENTS
   INTERCEPT ?
   REVENUES ?

Answer 1

In regression analysis, the dependent variable is denoted "Y" and the independent variables are denoted by "X"

So here dependent variable is Maintenance and Repair Cost ($000) and independent variable is Revenues ($000)

1. Bring data into excel sheet.

2. Go to data tab and choose data analysis and choose Regression statistics

output:

Multiple R	0.8758188
R Square	0.7670586
Adjusted R Square	0.75647
Standard Error	0.3181921
Observations	24

Intercept	4.1403
Revenues ($000)	-0.0336