Garfeld Company manufactures a popular brand of dog repellant known as DogGone I
ID: 394309 • Letter: G
Question
Garfeld Company manufactures a popular brand of dog repellant known as DogGone It, which it seils in galion-size bottles with comes from orders placed by homeowners who are trying to keep neighborhood dogs out of their yards. Garfield's operating information for the frst a spray attachment. The majonity of Garfield's business six months of the year follows Number of Bottles Sold Operating Month January February March April May June 800 1,400 1,750 S 11,600 15,740 15,800 27.245 380035000 3,480 Required 3. Using the high-low method, calculate Garfield's total fixed operating costs and variable operating cost per bottle 3 Answer is complete but not entirely correct Unit Fixed Cost 5,360 0 4. Perform a least-squares regression analysis on Garfield's data. (Use Microsoft Excel or a statistical packageTo find the coefficients using least-squares regression your answers to 3 decimal places) Answer is complete but not entirely correct. ,671.603 X Variable 1 7.119 0 7.119 0Explanation / Answer
1. Using high low method
Max total Cost = $35,000 Min total cost = $11,600
Units corresponding to max total cost = 3800
Units corresponding to min total cost = 800
Variable cost = (35000-11600)/(3800-800) = 7.80
For fixed cost
Total cost = Fixed cost + Varaiable cost* No. of units
35000 = Fixed cost + 7.8*3800
Fixed cost = 35000 - 7.8*3800 = $5,360
2. After running the regression on the data
Intercept = 4671.603
X variable = 7.119
3.
Multiple R = 0.967
R square = 0.935
Adjusted R square = 0.919
Standard error = 2471
Observations = 6
No. of bottle explains = 94% variation in total cost
4. Regression equation
Total cost = 4671.603 + No. of bottles*7.119
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