Question

Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie’s prints everything from bowling team jerseys to fraternity/sorority apparel to special event shirts, summer league baseball and softball team jerseys are the company’s biggest source of revenue.

A portion of Leslie’s operating information for the company’s last year follows:

	Number of	Operating
Month	Jerseys Printed	Cost
January	170	$5,790
February	190	5,825
March	545	8,660
April	725	9,760
May	645	9,260
June	425	6,210
July	335	6,145
August	260	5,925
September	125	4,810
October	315	6,010
November	260	5,970
December	150	4,950

Required:
3. Using the high-low method, calculate the store’s total fixed operating costs and variable operating cost per jersey.

Variable Cost per Jersey=$8.25

Fixed Cost = $3779

4. Using the high-low method results, calculate the store’s expected operating cost if it printed 480 jerseys.

Total Cost= $7739
5. Perform a least-squares regression analysis on Leslie’s data.
6. Using the regression output, create a linear equation (y = a + bx) for estimating Leslie’s operating costs.
7. Using the least-squares regression results, calculate the store’s expected operating cost if it prints 620 jerseys.

Answer 1