Selecting a Basis for Predicting Shipping Expenses (Requires Computer Spreadsheet’) LO2,3 Boom Company assembles and sells portable speaker systems throughout the midwest. In an effort to improve the planning and control of shipping expenses, management is trying to determine which of three variables—units shipped, weight shipped, or sales value of units shipped—has the closest relationship with shipping expenses. The following information is available:

Required

a. With the aid of a spreadsheet program, determine whether units shipped, weight shipped, or sales value of units shipped has the closest relationship with shipping expenses.

b. Using the independent variable that appears to have the closest relationship to shipping expenses, develop a cost-estimating equation for total monthly shipping expenses.

c. Use the equation developed in requirement () to predict total shipping expenses in a month when 5,000 units, weighing 7,000 Ibs., with a total sales value of $114,000 are shipped.

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Units Month Shipped Weight Shipped (lbs.) Sales Value of Units Shipped May.. 6,000 9,300 $200,000 Shipping Expenses $ 8,960 June 10,000 12,000 220,000 12,320 July. 8,000 12,150 160,000 10,400 August 14,000 15,000 228,000 16,640 September. 12,000 10,500 280,000 13,760 October 9,000 12,000 320,000 13,120