14. A distributor has learned that an estimate for the packaging and processing costs can be predicted

Question:

14. A distributor has learned that an estimate for the packaging and processing costs can be predicted based on the weight of an order. To this end, a regression analysis is performed resulting in the mixed cost function: cost 5 63.63 1 0.279 weight.

a. What is the fi xed cost within this cost function?

b. What is the marginal cost within this cost function?

c. What was the independent variable within the regression analysis?

d. What was the dependent variable within the regression analysis?

e. What is the estimated cost for a package weighing 600 pounds?

f. The regression analysis reports an r2 of 0.9824. Interpret the meaning of this value.

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