Question

Exercise 6A-5 Least-Squares Regression [LO6-11]

[The following information applies to the questions displayed below.]

George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company’s products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks:

Week	Units			Total Etching Cost
1		4			$	18
2		3				17
3		8				25
4		6				20
5		7				24
6		2				16
		30			$	120

For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week.

Exercise 6A-5 Part 2

2a. Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per week.

2b. Express these estimates in the form Y = a + bX.

week. (Round your answers to 2 decimal places.)

2a.

Fixed etching cost per week	$3.88 answer incorrect
Variable etching cost per unit	$1.05 answer incorrect

Express these estimates in the form Y = a + bX. (Round your answers to 2 decimal places.)

2b.

Y=

$1.05 answer incorrect

+

$3.88 answer incorrect

X

Answer 1