Sales = Output TVC ($) 102,813 176,163 196,121 222,885 226,356 296,416 378,446 4
ID: 1177195 • Letter: S
Question
Sales = Output
TVC ($)
102,813
176,163
196,121
222,885
226,356
296,416
378,446
450,666
579,696
607,082
624,680
636,133
201,953
340,608
377,940
432,863
441,714
629,267
867,596
1,103,807
1,701,125
1,917,861
2,195,352
2,479,195
a. Using regression analysis, find an equation that best fits the data to represent the TVC function.
b. At what sales/output level will marginal costs (MC) reach a minimum?
c. Estimate the value of TVC for sales/output level 250,000 units, and calculate the 95% confidence interval for your estimate.
Sales = Output
TVC ($)
102,813
176,163
196,121
222,885
226,356
296,416
378,446
450,666
579,696
607,082
624,680
636,133
201,953
340,608
377,940
432,863
441,714
629,267
867,596
1,103,807
1,701,125
1,917,861
2,195,352
2,479,195
Explanation / Answer
This solution shows a regression output on sales and variable costs for Four Winds Novelty Company. The problem includes data analysis based on the monthly internet sales and total variable costs. The regression analysis has been done with the Excel Data Analysis tool, with explanations on how to interpret the output data. The solution also shows how to find the minimum level of marginal cost (MC) and to predict a 95% confidence level of sales on a particular level of variable costs using the regression equation.
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