Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfields business comes from orders placed by homeowners who are trying to keep neighborhood dogs out of their yards. Garfields operating information for the first six months of the year follows:

Month

Number of Bottles Sold

Operating Cost

January 1,080 $ 10,570

February 1,330 $15,670

March 1,850 $16,050

April 2,480 $19,680

May 3,490 $27,350

June 3,610 $34,750

Required:

3. Using the high-low method, calculate Garfields total fixed operating costs and variable operating cost per bottle.

4. Perform a least-squares regression analysis on Garfields data.

5. Determine how well this regression analysis explains the data.

6. Using the regression output, create a linear cost equation (y = a + bx) for estimating Garfields operating costs.