Jefferson County Airport handles several daily commuter flights and
many private flights. The county budget officer has compiled the
following data regarding airport costs and activity over the past year.
Required:
1. Draw a scatter diagram of the airport costs shown above.
2. Build a spreadsheet: Construct an Excel spreadsheet and use the
Excel commands to perform a least-squares regression. Estimate the
variable- and fixed-cost components in the airport’s cost behavior
pattern.
3. Write the least-squares regression equation for the airport’s costs.
4. Predict the airport’s costs during a month when 1,500 flights originate at the airport.
5. Using the Excel spreadsheet prepared for requirement (2), compute
the coefficient of determination (R2) for the regression equation.
Briefly interpretR2.
