Multiple regression. The managers of Quality Meals, a catering company, are analyzing the costs involved in providing catering services. Managers have selected the following cost drivers: units of meals produced, total deliveries, number of VIP services, number of new customers, and new products developed. Here are the cost data and levels of cost driver activity for the past 16 months.

Required:

a. Using multiple regression, find the cost-driver rates for each of the cost drivers.

b. Assuming the following level of cost-driver volume for the next month, what is the estimated cost? (Don't forget to include the intercept of the regression in your estimate.)

c. Quality Meals is considering outsourcing delivery. Compared to your answer in requirement b., how much would be saved per month by outsourcing the delivery service before considering the cost of outsourcing?

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Month Total Overhead Meals Units VIP Deliveries Services New Customers New Products 123456789012 $ 69,094 12,690 1,340 345 3 64.927 11,980 1,180 310 4 0 60,332 10,950 1,050 280 4 1 57.953 10.280 930 245 5 0 55.984 9.020 840 205 7 2 53,119 8.130 780 185 8 2 52,706 7.540 700 160 10 53,874 6.980 630 144 12 53,445 8.930 680 135 10 O 20 3 4 2 54,869 9,800 760 120 9 0 59.985 10,560 890 175 8. 2 61,121 11.560 1.070 200 7 0 13 63,926 11.710 1,240 240 6 0 14 66.602 12.460 1.390 285 4 0 15 72,773 13.520 1,450 330 4 1 16 71,391 13,620 1,510 315 Totals $972,101 169,730 16.440 3,674 103