Question

Selecting a Basis for Predicting Shipping Expenses (Requires Computer Spreadsheet*)
Boom Company assembles and sells portable speaker systems in the midwest. In an effort to improve the planning and control of shipping expenses, management is trying to determine which of three variables—units shipped, weight shipped, or sales value of units shipped—has the closest relationship with shipping expenses. The following information is available:

Month	Units Shipped	Weight Shipped (lbs.)	Sales Value of Units Shipped	Shipping Expenses
May	6,000	9,300	$200,000	$8,960
June	10,000	12,000	220,000	12,320
July	8,000	12,150	160,000	10,400
August	14,000	15,000	228,000	16,640
September	12,000	10,500	280,000	13,760
October	9,000	12,000	320,000	13,120

b. Using the independent variable that appears to have the closest relationship to shipping expenses, develop a cost-estimating equation for total monthly shipping expenses.

Round answers to two decimal places.

Shipping expenses

=

Answer

+

Answer

X

c. Use the equation developed in requirement (b) to predict total shipping expenses in a month when 5,000 units, weighing 7,000 lbs., with a total sales value of $114,000 are shipped.

Round answers to two decimal places.

$Answer

Answer 1