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A cost accountant has derived the following data on the weekly output of standard size boxes from a factory. Week Output (thousands) Total cost (thousand
A cost accountant has derived the following data on the weekly output of standard size boxes from a factory.
Week | Output (thousands) | Total cost (thousand dollars) |
1 | 20 | 60 |
2 | 2 | 25 |
3 | 4 | 26 |
4 | 23 | 66 |
5 | 18 | 49 |
6 | 14 | 48 |
7 | 10 | 35 |
8 | 8 | 18 |
9 | 13 | 40 |
(a) Determine the regression equation from which we can predict the total cost in terms of the weekly production. (4%)
(b) In the following week it is planned to produce 15,000 standard size boxes. Estimate the total cost of producing this quantity. (1%)
(c) Compute the linear correlation coefficient. Interpret the result.
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