a Garcia Corporation manufactures a drink bottle, model CL24. During 2020, Garcia produced 170,000 bottles at a total cost of $612,000. Young Corporation has offered to supply as many bottles as Garcia wants at a cost of $3.75 per bottle. Garcia anticipates needing 183,000 bottles each year for the next few years. Read the fequirements. Requirement 1a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Young's offer? The average cost of $ 3.60 per bottle is less than Young's offer. Requirement 1b. Can Garcia use the answer in requirement 1a to determine the cost of manufacturing 183,000 drink bottles? Explain. Garcia cannot take the average manufacturing cost in 2020 to determine the total cost of manufacturing 183,000 drink bottles. The reason is that some of the total costs are fixed costs and some are variable costs Requirement 2. Garcia's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the drink bottle as the dependent variable and drink bottles produced as the independent variable: y = $434,000 + $2.00x. During the years used to estimate the regression equation, the production of drink bottles varied from 160,000 to 193,000. Using this equation, estimate how much it would cost Garcia to manufacture 183,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Young? Estimate how much it would cost Garcia to manufacture 183,000 drink bottles, then calculate the cost to purchase the bottles. Estimated cost to make the bottles Cost to purchase the bottles 1. a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Young's offer? b. Can Garcia use the answer in requirement 1a to determine the cost of manufacturing 183,000 drink bottles? Explain. Garcia's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the drink bottle as the dependent variable and drink bottles produced as the independent variable: 2. y = $434,000 + $2.00X During the years used to estimate the regression equation, the production of drink bottles varied from 160,000 to 193,000. Using this equation, estimate how much it would cost Garcia to manufacture 183,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Young? What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles? 3