Question
George Caloz & Frres, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the companys products, a platinum diving watch, goes
George Caloz & Frres, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the companys products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks:
Week | Units | Total Etching Cost |
---|---|---|
1 | 4 | $ 18 |
2 | 3 | 17 |
3 | 8 | 25 |
4 | 6 | 20 |
5 | 7 | 24 |
6 | 2 | 16 |
30 | $ 120 |
For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week.
Required:
1. Prepare a scattergraph plot. (Plot etching costs on the vertical axis and units on the horizontal axis.)
Instructions:
1. On the graph below, use the point tool (Week 1) to plot units on the horizontal axis and total etching cost on the vertical axis.
2. Repeat the same process for the plotter tools (Week 2 to Week 6).
3. To enter exact coordinates, click on the point and enter the values of x and y.
4. To remove a point from the graph, click on the point and select delete option.
2-a. Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per week.
2-b. Express these estimates in the form Y = a + bX.
3. If the company processes five units next week, what would be the expected total etching cost? (Round your intermediate calculations and final answer to 2 decimal places.)
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