Question

Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfield’s business comes from orders placed by homeowners who are trying to keep neighborhood dogs out of their yards. Garfield’s operating information for the first six months of the year follows:

Month	Number of Bottles Sold	Operating Cost
January	1,060	$	10,780
February	1,410		15,730
March	1,790		15,990
April	2,500		19,530
May	3,490		27,740
June	3,790		34,890

Required:
3. Using the high-low method, calculate Garfield’s total fixed operating costs and variable operating cost per bottle. (Do not round your intermediate calculations. Round your variable cost per unit answer to 2 decimal places and fixed cost answer to the nearest whole number.)

Variable cost per unit: 8.83

fixed cost : 1420

4. Perform a least-squares regression analysis on Garfield’s data. (Use Microsoft Excel or a statistical package to find the coefficients using least-squares regression. Round your answers to 3 decimal places.)

coefficients

intercept:

X variable 1:

5. Determine how well this regression analysis explains the data. (Round you regression statistics to three decimal places and your percentage answer to the nearest whole number.)

Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
From the regression output, number of bottles explains about		%	of the variability in Garfield’s total cost.

6. Using the regression output, create a linear cost equation (y = a + bx) for estimating Garfield’s operating costs. (Round your answers to 3 decimal places.)

total cost = + (Number of bottles)

Answer 1