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(CIMA, adapted) Catherine McCarthy, sales manager of Baxter Arenas, is checking to see if there is any relationship between promotional costs and ticket rev- enues at the sports stadium. She obtains the following data for the past 9 months: Promotional Costs $52,000 65,000 80,000 Month Ticket Revenues April May June $200,000 270,000 320,000 480,000 July August September 90,000 100,000 110,000 430,000 450,000 October 540,000 120,000 November 670,000 180,000 197,000 December 751,000 She estimates the following regression equation: Ticket revenues = $65,583 + ($3.54 x Promotional costs)

(CIMA, adapted) Catherine McCarthy, sales manager of Baxter Arenas, is checking to see if there is any relationship between promotional costs and ticket rev- enues at the sports stadium. She obtains the following data for the past 9 months: Promotional Costs $52,000 65,000 80,000 Month Ticket Revenues April May June $200,000 270,000 320,000 480,000 July August September 90,000 100,000 110,000 430,000 450,000 October 540,000 120,000 November 670,000 180,000 197,000 December 751,000 She estimates the following regression equation: Ticket revenues = $65,583 + ($3.54 x Promotional costs)

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 21E: At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management...
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Plot the relationship between promotional costs and ticket revenues. Also draw the regression line and evaluate it using the criteria of economic plausibility, goodness of fit, and slope of the regression line.

(CIMA, adapted) Catherine McCarthy, sales manager of Baxter Arenas, is checking to see if there is any relationship between promotional costs and ticket rev- enues at the sports stadium. She obtains the following data for the past 9 months: Promotional Costs $52,000 65,000 80,000 Month Ticket Revenues April May June $200,000 270,000 320,000 480,000 July August September 90,000 100,000 110,000 430,000 450,000 October 540,000 120,000 November 670,000 180,000 197,000 December 751,000 She estimates the following regression equation: Ticket revenues = $65,583 + ($3.54 x Promotional costs)
Transcribed Image Text:(CIMA, adapted) Catherine McCarthy, sales manager of Baxter Arenas, is checking to see if there is any relationship between promotional costs and ticket rev- enues at the sports stadium. She obtains the following data for the past 9 months: Promotional Costs $52,000 65,000 80,000 Month Ticket Revenues April May June $200,000 270,000 320,000 480,000 July August September 90,000 100,000 110,000 430,000 450,000 October 540,000 120,000 November 670,000 180,000 197,000 December 751,000 She estimates the following regression equation: Ticket revenues = $65,583 + ($3.54 x Promotional costs)
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