Question
How do I get these answers? Kara Meyer, owner ofTulipTime, operates a local chain of floral shops. Each shop has its own delivery van. Instead
How do I get these answers?
Kara Meyer, owner ofTulipTime, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat deliveryfee,Meyer wants to set the delivery fee based on the distance driven to deliver the flowers.Meyer wants to separate the fixed and variable portions ofher van operating costs so thatshe has a better idea how delivery distance affects these costs.
She has the following data from the past sevenmonths:
Month Miles Driven Van Operating Cost
January 16000 $5490
February 17500 $5700
March 14900 $4910
April 16200 $5340
May 16900 $5820
June 15100 $5410
July 14500 $4920
Requirement 1.Determine thecompany's cost equation(use the output from the Excelregression).(Round the amounts to two decimalplaces.)
y = $ x + $
Requirement 2.Determine theR-square (use the output from the Excelregression).
TheR-square is
What doesTulipTime's R-square indicate?
Requirement 3.Predict van operating costs at a volume of17,000miles assuming the company would use the cost equation from the Excel regression regardless of itsR-square. Should the company rely on this costestimate? Why or whynot?(Round your answer to the nearestcent.)
The operating costs at a volume of 17,000 miles is $
Should the company rely on this costestimate? Why or whynot?
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