1. Is an R square of 0.9 good? Why or why not?
2. Explain how to use the output of linear regression analysis to define the cost (or revenue) line.
3. What are the advantages and disadvantages of using linear regression analysis to define cost (or revenue) lines?
Leasure Locks is a hair styling salon. The following is a list of costs connected with the salon. Identify each of the costs as variable, fixed, or mixed. Assume that activity is measured as the number of customers. Use V for variable, F for fixed, and M for mixed.
________ A. Hair products sold to customers
________ B. Computer costs for inventory maintenance
________ C. Stylists’ wages and commissions
________ D. Hair dryers
________ E. Combs, brushes, and miscellaneous hair supplies
________ F. Perming solution
________ G. Laundry service for towels and gowns
________ H. Shampoo and rinse
________ I. Utilities: water, electricity, and heat
________ J. Rent on the facilities