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: $15.68 (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.)
a. $34,104
b. $61,368
c. $45,946
d. $70,802

Answer 1

To estimate the total selling costs for the coming year, we use the regression equation and substitute the given values. The estimated total selling costs for the coming year is $75,626.

Step-by-step explanation:

To estimate the total selling costs for the coming year, we can use the regression equation:

Total Selling Costs = Intercept + (X Variable * Number of Orders)

Using the given data, the intercept is $2,842 and the X variable is $15.68. If Barium expects 4,800 customer orders, we can substitute these values into the equation:

Total Selling Costs = $2,842 + ($15.68 * 4,800)

Solving this equation gives us a total selling cost of approximately $75,626.40. Rounding this to the nearest whole number, the estimated total selling costs for the coming year is $75,626. Therefore, none of the provided options (a, b, c, d) is correct. The correct answer is $75,626.