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:

MonthNumber of Bottles SoldOperating CostJanuary970$ 10,680February1,39015,650March1,82016,070April2,41019,900May3,55027,580June3,75034,640

Required:

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

Note: Do not round your intermediate calculations. Round your variable cost per unit answer to 2 decimal places and fixed cost answer to the nearest whole number.

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

Note: Use Microsoft Excel or a statistical package to find the coefficients using least-squares regression. Round your answers to 3 decimal places.

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

Note: Round your regression statistics to three decimal places and, observation and percentage answer to the nearest whole number.

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

Note: Round your answers to 3 decimal places.

\begin{tabular}{|l|lr|} \hline Variable Cost per Unit & $ & 8.62 \\ \hline Fixed Cost & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline Total Cost = & + & (Number of Bottles) \\ \hline \end{tabular} \begin{tabular}{|l|l|} & \multicolumn{1}{c|}{ Coefficients } \\ \hline Intercept & \\ \hline X Variable 1 & \\ \hline \end{tabular} \begin{tabular}{|l|lr|} \hline Variable Cost per Unit & $ & 8.62 \\ \hline Fixed Cost & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline Total Cost = & + & (Number of Bottles) \\ \hline \end{tabular} \begin{tabular}{|l|l|} & \multicolumn{1}{c|}{ Coefficients } \\ \hline Intercept & \\ \hline X Variable 1 & \\ \hline \end{tabular}