Question

1. Production Volume (units)	Total Cost ($)
   400	3500
   450	4500
   550	4900
   600	5400
   700	5900
   750	6500
   Production Target	Est. Cost ($)
   500

   Compute b₁ and b₀ (to 1 decimal).

   b₁ _______

   b_{0_________}

   Complete the estimated regression equation (to 1 decimal).

   y = ____ +_____ x

2. According to this model, what is the change in cost (in dollars) for every unit produced (to 1 decimal)?

   _______

3. Compute the coefficient of determination (to 3 decimals). Note: report r² between 0 and 1.

   r² = _______

   What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)?

   _____%_____

4. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)?

Answer 1

The statistical software output for this problem is :

(a)

b1 = 7.6

b0 = 746.7

y = 746.7 + 7.6

(b)

The change in cost = 7.6

(c)

r² = 0.959

95.9%

(d)

Total cost = 4547