Questions: Shown below is the output from a linear model predicting armspan (in cm) from height (in inches) and summary statistics. Assume that the association between armspan and height is linear. Use the output and summary statistics to complete parts a through d. LinReg y=a+bx a=27.336548588 b=2.085486727 Height, x: 63.59, 3.58 Armspan, y: 159.95, 7.70 a. Report the regression equation, using the words "Height" and "Armspan," not x and y. A. Predicted Armspan = 2.09 + 27.34 Height B. Predicted Height = 27.34 + 2.09 Armspan C. Predicted Armspan = 27.34 + 2.09 Height D. Predicted Height = 2.09 + 27.34 Armspan

Shown below is the output from a linear model predicting armspan (in cm) from height (in inches) and summary statistics. Assume that the association between armspan and height is linear. Use the output and summary statistics to complete parts a through d.
LinReg
y=a+bx
a=27.336548588
b=2.085486727
Height, x: 63.59, 3.58
Armspan, y: 159.95, 7.70
a. Report the regression equation, using the words "Height" and "Armspan," not x and y.
A. Predicted Armspan = 2.09 + 27.34 Height
B. Predicted Height = 27.34 + 2.09 Armspan
C. Predicted Armspan = 27.34 + 2.09 Height
D. Predicted Height = 2.09 + 27.34 Armspan

Transcript text: Shown below is the output from a linear model predicting armspan (in cm ) from height (in inches) and summary statistics. Assume that the association between armspan and height is linear. Use the output and summary statistics to complete parts a through d. LinReg y=a+bx a=27.336548588 b=2.085486727 Height, $x$ & 63.59 & 3.58 Armspan, $y$ & 159.95 & 7.70 a. Report the regression equation, using the words "Height" and "Armspan," not $x$ and $y$. A. Predicted Armspan $=2.09+27.34$ Height B. Predicted Height $=27.34+2.09$ Armspan C. Predicted Armspan $=27.34+2.09$ Height D. Predicted Height $=2.09+27.34$ Armspan

Solution

Solution Steps

Step 1: Identify the regression equation

The regression equation is given in the form \( y = a + bx \), where:

\( y \) is the dependent variable (Armspan)
\( x \) is the independent variable (Height)
\( a \) is the y-intercept
\( b \) is the slope

From the given data:

\( a = 27.336548588 \)
\( b = 2.085486727 \)

Step 2: Substitute the variables into the equation

Substitute the given values into the regression equation: \[ \text{Armspan} = 27.34 + 2.09 \times \text{Height} \]

Step 3: Match the equation with the given options

Compare the derived equation with the provided options:

Option A: Predicted Armspan = 2.09 + 27.34 Height
Option B: Predicted Height = 27.34 + 2.09 Armspan
Option C: Predicted Armspan = 27.34 + 2.09 Height
Option D: Predicted Height = 2.09 + 27.34 Armspan

The correct match is: \[ \text{Option C: Predicted Armspan} = 27.34 + 2.09 \times \text{Height} \]

Final Answer

Option C: Predicted Armspan = 27.34 + 2.09 Height

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Morocco Corporation Budgeted Income Statement Sales. 30,000,000 Cost of Goods Sold: Fixed 17,900,000 Gross Margin. Selling and Admin. Expenses: 9,800,000 5,400,000 800,000 3,200,000 9,400,000 400,000 Since completion of the above statement, Morocco's management has learned that the independent sales agents are demanding an increase in the commission rate to 20% of sales for the upcoming year. This would be the third increase in commissions demanded by the independent sales agents in five years. As a result, Morocco's management has decided to investigate the possibility of hiring its own sales staff to replace the independent sales agents. Morocco's controller estimates that the company will have to hire eight salespeople to cover the current market area, and the total annual payroll cost of these employees will be about 700,000, including fringe benefits. The salespeople will also be paid commissions of 10% of sales. Travel and entertainment expenses are expected to total about 600,000 for the year. The company will also have to hire a sales manager and support staff whose salaries and fringe benefits will come to about 200,000 per year. To make up for the promotions that the independent sales agents had been running on behalf of Morocco, management believes that the company's budget for fixed advertising expenses should be increased by 500,000. Required: 1. (4 points) Assuming sales of 30,000,000, construct a budgeted contribution margin format income statement for the upcoming year with the following alternatives: a. The independent sales agents' commission rate stays the same at 18%. b. The independent sales agents' commission rate increases to 20%. c. The company employs its own sales force. 2. (2 points) Calculate Morocco's break-even point in sales dollars next year for each of these alternatives: a. The independent sales agents' commission rate stays the same at 18%. b. The independent sales agents' commission rate increases to 20%. c. The company employs its own sales force. 3. (2 points) Refer to your answer in (1)(b) above. If the company employs its own sales force, what volume of sales would be necessary to generate the same net operating income the company would generate in (1)(b) above? 4. (2 points) Determine the volume of sales at which net operating income would be equal regardless of whether Morocco Corporation sells through agents (at a 20% commission rate) or employs its own sales force.

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