DATA INPUT
Cost of
Number of On-Board Flight
Month Passengers Service
January 16,000 54,000$
February 17,000 54,000
March 16,000 57,000
April 18,000 60,000
May 15,000 54,000
June 17,000 57,000
SOLUTION
1. Cost behavior of the airline’s on-board flight service using least-squares regression:
(a) Calculation of regression parameters using Excel regression commands:
(b) Cost formula:
where X denotes thousands of passengers
2. Calculation of R2 using Excel regression commands: