Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Company€™s purchasing cost and number of purchase orders.
In Exercise 3.4

The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are:
Intercept .... 15,021
X variable 1 .... 9.74
Required:
1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate.
2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month?
3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? What is the total fixed purchasing cost? Why doesn€™t it equal the fixed cost calculated in Requirement 1?

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Month Purchasing Cost $18,860 18,065 19,250 18,050 19,345 19,500 19,670 20,940 19,430 20,020 18,800 19,340 Number of Purchase Orders January February March April May June July August September October November December 370 330 370 410 400 450 460 560 440 500 470 480