Greene Corporation manufactures a drink bottle, model CL$24.$ During $2020,$ Greene produced $160,000$ bottles at a total cost of $$736,000.$ Sealy

Corporation has offered to supply as many bottles as Greene wants at a cost of $$4\mathrm{.}75$ per bottle. Greene anticipates needing $175,000$ bottles each

year for the next few years.

Read the requirements.

Requirement $1$a$.$ 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 $1$b$.$ Can Greene use the answer in requirement $1$a to determine the cost of manufacturing $175,000$ drink bottles? Explain.

Greene cannot take the average manufacturing cost in $2020$ to determine the total cost of manufacturing $175,000$ drink bottles. The reason is

that some of the total costs are fixed costs and some are variable costs $.$

Requirement $2.$ Greene'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=$$$439,000+$$$2\mathrm{.}00x.$ During the

years used to estimate the regression equation, the production of drink bottles varied from $148,000$ to $185,000.$ Using this equation, estimate how

much it would cost Greene to manufacture $175,000$ 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 Greene to manufacture $175,000$ drink bottles, then calculate the cost to purchase the bottles.

Estimated cost to make the bottles

Cost to purchase the bottles