(Solution) - The Cost Department of Kemp Supply Company attempts to establish -(2025 Original AI-Free Solution)

Paper Details

The Cost Department of Kemp Supply Company attempts to establish a budget to assist in the control of marketing expenses. An examination of individual expenses shows:

Statistical analysis is needed to split the travel expense satisfactorily into its fixed and variable portions. Before such an analysis is begun, it is thought that the variable portion of the travel expense might vary in accordance either with the number of calls made on customers each month or the value of orders received each month. Records reveal the following details over the past twelve months:
Required:
(1) Compute the coefficient of correlation, r, and coefficient of determination, r2, between (a) the travel expense and the number of calls made and (b) the travel expense and orders received. Round to four decimal places.
(2) Compare the answers obtained in requirements la and 1 b.