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Graham Corporation manufactures a drink bottle, model CL24. During 2020, Graham produced 230,000 bottles at a total cost of $966,000. Sealy Corporation has offered to

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Graham Corporation manufactures a drink bottle, model CL24. During 2020, Graham produced 230,000 bottles at a total cost of $966,000. Sealy Corporation has offered to supply as many bottles as Graham wants at a cost of $4.35 per bottle. Graham anticipates needing 243,000 bottles each year for the next few years. Read the requirements. Requirement 1a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Sealy's offer? The average cost of per bottle is than Sealy's offer. Requirement 1b. Can Graham use the answer in requirement 1a to determine the cost of manufacturing 243,000 drink bottles? Explain. Graham take the average manufacturing cost in 2020 to determine the total cost of manufacturing 243,000 drink bottles. The reason is that 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= $439,000 + $3.00X. During the years used to estimate the regression equation, the production of drink bottles varied from 220,000 to 253,000. Using this equation, estimate how much it would cost Graham to manufacture 243,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Sealy? Estimate how much it would cost Graham to manufacture 243,000 drink bottles, then calculate the cost to purchase the bottles. Estimated cost to make the bottles Cost to purchase the bottles It will cost to purchase the bottles rather than manufacture them in-house. Requirement 3. What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles? (Select all that apply.) A. Is the relationship between total manufacturing costs and quantity of drink bottles economically plausible? B. Can Graham's competitors manufacture drink bottles at a cost less than Graham? C. How good is the goodness of fit? That is, how well does the estimated line fit the data? D. Does the slope of the regression line indicate that a strong relationship exists between manufacturing costs and the number of drink bottles produced? ? Choose from any list or enter any number in the input fields and then continue to the next

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