Leslie Sporting Goods is a locally owned store that specializes in printing team

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.

     

        

Using the high-low method, calculate the store’s total fixed operating costs and variable operating cost per jersey. (Round your "Variable Cost" answer to 2 decimal places and "Fixed Cost" answer to the nearest whole number.)

Variable Cost per unit= $9.50

Fixed Cost= $ 3323

Using the high-low method results, calculate the store’s expected operating cost if it printed 475 jerseys. (Round your answer to the nearest whole number.)

Total Cost= ?

Perform a least-squares regression analysis on Leslie’s data. (Use Microsoft Excel or a statistical package to find the coefficients using least-squares regression. Round your answers to 2 decimal places.)

Coefficents

Intercept=   ?

X Variable 1=   ?

Using the regression output, create a linear equation (y = a + bx) for estimating Leslie’s operating costs. (Round your answers to 2 decimal places.)

Total Cost= ? +   ? (Number of jerseys)

Total Cost = ?

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.

Explanation / Answer

Solution:

Store's expected operating cost = 3323+9.50*475 = $7835.5

Unit Variable Cost = b = (nxy - x . y)/( n x2- (x)2

Total Fixed Cost = a = (y - bx)/ n

b= (12*31173200 - 4235*79335)/ 12*1867075 - 42352

= 8.52

a= (79335-8.52*4235)/12 = 3604.4

Therefore, the equation is y = 3604.4 + 8.52 X

The store's expected operating costs = y = 3604.4 + 8.52*620 =$ 8886.8

Month Number of jersey printed(x) Operating cost(y) x(square) xy january 200 $                    5,695.00 40000 $     11,39,000.00 February 210 $                    5,840.00 44100 $     12,26,400.00 March 570 $                    8,660.00 324900 $     49,36,200.00 april 675 $                    9,735.00 455625 $     65,71,125.00 may 635 $                    9,230.00 403225 $     58,61,050.00 june 445 $                    6,260.00 198025 $     27,85,700.00 july 365 $                    6,150.00 133225 $     22,44,750.00 august 240 $                    5,945.00 57600 $     14,26,800.00 september 165 $                    4,890.00 27225 $       8,06,850.00 october 295 $                    6,000.00 87025 $     17,70,000.00 november 245 $                    5,975.00 60025 $     14,63,875.00 december 190 $                    4,955.00 36100 $       9,41,450.00 total 4235 $                 79,335.00 1867075 $ 3,11,73,200.00

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