XYZ Sdn. Bhd. needs to forecast its personnel department costs. The following output was obtained from a regression programme used to estimate the department's costs as a function of the number of...


XYZ Sdn. Bhd. needs to forecast its personnel department costs. The following output was<br>obtained from a regression programme used to estimate the department's costs as a function<br>of the number of employees:<br>Dependent variable = Personnel costs<br>R-square<br>Standard error<br>Observations<br>0.7255<br>612.0926<br>24<br>Independent<br>variable<br>Intercept (a)<br>Employees (b)<br>Coefficients<br>Standard Error<br>P-value<br>0.178<br>8,421 (rounded)<br>492.703<br>2,687.979<br>164.949<br>0.045<br>Monthly data for the past two years were used to construct these estimates. Cost<br>relationships are expected to be the same for the coming period.<br>Required:<br>a) What are the estimated personnel costs for 4,200 employees?<br>b) How confident are you that a significant cost-driver relation exits at alpha equal to<br>5%?<br>

Extracted text: XYZ Sdn. Bhd. needs to forecast its personnel department costs. The following output was obtained from a regression programme used to estimate the department's costs as a function of the number of employees: Dependent variable = Personnel costs R-square Standard error Observations 0.7255 612.0926 24 Independent variable Intercept (a) Employees (b) Coefficients Standard Error P-value 0.178 8,421 (rounded) 492.703 2,687.979 164.949 0.045 Monthly data for the past two years were used to construct these estimates. Cost relationships are expected to be the same for the coming period. Required: a) What are the estimated personnel costs for 4,200 employees? b) How confident are you that a significant cost-driver relation exits at alpha equal to 5%?

Jun 03, 2022
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