Question

Barium, Inc., ran a regression on the last 12 months data of selling expenses. The selling expenses vary according to the number of orders placed by customers. Following data is available after regression analysis of selling expenses:

Intercept----$2,842 (rounded to the nearest dollar)
X variable 1----5.68 (rounded to the nearest cent)
Barium wants to estimate the selling cost for the coming year and expects 4,800 customer orders. Determine the estimated total selling costs for the coming year. (Round your answer to the nearest whole number.)

Answer 1

To estimate selling costs, apply the regression equation Я = 2,842 + 5.68(4,800). The estimated total selling costs with 4,800 customer orders for the coming year are calculated to be $30,106.

Step-by-step explanation:

To estimate the selling costs for the coming year for Barium, Inc., we will use the regression analysis data provided. The equation determined from the regression is given by the form Я = a + bx, where Я is the estimated selling cost, a is the intercept, and b is the slope coefficient for the number of customer orders (X variable 1).

Using the given data, we have:

• Intercept (a) = $2,842
• Slope (b) = 5.68
• Customer Orders (X) = 4,800

The formula to calculate the estimated total selling costs is thus: Я = $2,842 + 5.68(X).

Substituting the expected number of customer orders into our formula, we get Я = $2,842 + 5.68(4,800).

Calculating this, the estimated total selling costs for 4,800 orders is Я = 2,842 + 27,264 = $30,106.

Therefore, the estimated total selling cost for Barium, Inc., with an expectation of 4,800 customer orders for the coming year is $30,106 (rounded to the nearest whole number).