Question

11 Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfield's business comes from orders placed by homeowners who are trying to keep neighborhood dogs out of their yards. Garfield's operating information for the first six months of the year follows: 0.33 points Skipped Month January February March April May June Number of Bottles Sold 970 1,390 1,820 2,410 3,550 3,750 Operating Cost $10,680 15,650 16,070 19,900 27,580 34,640 eBook Print Required: 3. Using the high-low method, calculate Garfield's total fixed operating costs and variable operating cost per bottle. 4. Perform a least-squares regression analysis on Garfield's data. 5. Determine how well this regression analysis explains the data. 6. Using the regression output, create a linear cost equation (y = a + bx) for estimating Garfield's operating costs. References Complete this question by entering your answers in the tabs below. Required 3 Required 4 Required 5 Required 6 Using the high-low method, calculate Garfield's total fixed operating costs and variable operating cost per bottle. (Do not round your intermediate calculations. Round your variable cost per unit answer to 2 decimal places and fixed cost answer to the nearest whole number.) Variable Cost per Unit Fixed Cost Required 4 >

Answer 1

3. High-low Method
Variable Cost per unit = ($34640 - 10680) / (3750 - 970) = $8.62 per unit
Fixed Cost = $34640 - 3750 x $8.62 = $2315 or $2319

4.

	Coefficients
Intercept	3358.412
X Variable 1	7.514

5.

Regression Statistics
Multiple R	0.971
R Square	0.942
Adjusted R Square	0.928
Standard Error	2369.132
Observations	6

It explains 94% of variability

6.
Total Cost = $3358.412 + $7.514 x Number of Bottles

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