Graham Corporation manufactures a drink bottle, model CL$24.$ During $2020,$ Graham produced $200,000$ bottles at a total cost of $$570,000.$ Ryan Corporation has offered to supply as many bottles as Graham wants at a cost of $$2\mathrm{.}75$ per bottle. Graham anticipates needing $213$;$000$ bottles each year for the next few years.

Read the requirements.

Requirement $1.$ What is the average cost of manufacturing a drink bottle in $2020?$ How does it compare to Ryan's offer?

The average cost of

$$2\mathrm{.}85$ per bottle is than Ryan's offer.

Requirement $2.$ Graham'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=$$$432,000+$$$1\mathrm{.}00x.$ During the years used to estimate the regression equation, the production of drink bottles varied from $190,000$ to $223,000.$ Using this equation, estimate how much it would cost Graham to manufacture $213,000$ drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Ryan?

Estimate how much it would cost Graham to manufacture $213,000$ drink bottles, then calculate the cost to purchase the bottles.

$\backslash$table$[[$Estimated cost to make the bottles,$$,645,000],[$Cost to purchase the bottles,$$,585,750]]\text{'}$

It will cost $$59,250$ less

to purchase the bottles rather than manufacture

them in$-$house.