Please do only the last three 12.24 COST ANALYSIS FOR A SHIPPING DEPARTMENT. Multiple regression is used bySHIPaccountants in cost analysis to shed light on the factors that cause costs to be incurred and themagnitudes of their effects. Sometimes, it is desirable to use physical units instead of cost as thedependent variable in a cost analysis (e.g., if the cost associated with the activity of interest is afunction of some physical unit, such as hours of labor). The advantage of this approach is that theregression model will provide estimates of the number of labor hours required under differentcircumstances, and these hours can then be costed at the current labor rate (Horngren and Datar,Cost Accounting, 2014). The sample data shown in the table above have been collected from a firm'saccounting and production records to provide cost information about the firm's shipping department.These data are saved in the file. Consider the model------y = Bo + B₁x1 + B₂x2 + 3x3 + εa. Find the least squares prediction equation.b. Use an F-test to investigate the usefulness of the model specified in part a. Use a = .01 andstate your conclusion in the context of the problem.c. Test Ho: B₂ = 0 versus Ha: B20 using a = .05. What do the results of your test suggestabout the magnitude of the effects of x2 on labor costs?d. Find R² and interpret its value in the context of the problem.e. If shipping department employees are paid $7.50 per hour, how much less, on average, will itcost the company per week if the average number of pounds per shipment increases from alevel of 20 to 21? Assume that ₁ and 2 remain unchanged. Your answer is an estimate ofwhat is known in economics as the expected marginal cost associated with a 1-pound increasein 23.f. With what approximate precision can this model be used to predict the hours of labor? [Note:The precision of multiple regression predictions is discussed in Section 12.49.]g. Can regression analysis alone indicate what factors cause costs to increase? Explain. Regression Analysis: Labor versus Pounds, PctShip, AveWtRegression EquationLabor = 131.9 +2.73 Pounds + 0.0472 PctShip - 2.587 AveWtCoefficientsTermCoef SE Coef T-Value P-Value VIFConstant131.925.7Pounds2.282.73PctShip 0.0472 0.0933AveWtModel Summary5.13 0.0001.20 0.248 2.250.51 0.620 1.09-2.587 0.643 -4.03 0.001 2.17S R-sq R-sq(adj) R-sq(pred)72.70%63.04%9.81035 77.01%Analysis of VarianceSourceDF Adj ssRegression 3 5158.31Pounds1138.19124.621 1559.32 1559.3216 1539.8996.2419 6698.20PctShipAveWtErrorTotalAdj MS F-Value P-Value1719.44 17.87 0.000138.19 1.44 0.24824.620.260.62016.200.001Fits and Diagnostics for Unusual ObservationsFit Resid Std Resid-2.59 RObs Labor13 50.00 73.33 -23.33R Large residual

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The context is a cost analysis for a shipping department. Multiple regression is used to understand…