95) Conquest Industries made the following observations of supply costs at different production volume levels:

MonthSupply CostProduction (Units)

January$    960420

February1,060580

March1,180760

April980480

May940380

June900400

July1,120620

August1,260840

September1,200800

October1,360900

November1,160720

December1,040540

a. Using the method of least squares, develop an estimate of total fixed costs and variable cost per unit.  (Round your estimate of variable cost per unit to two decimal points.)

b. Develop a cost function to estimate supply cost at different volume levels and then estimate supply cost if production is expected to be 700 units.

c. If the coefficient of correlation was .95, what percentage of the change in supply cost could be explained by changes in production volume?



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