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Nantucket Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The companys controller, Alan Denney, has recently completed a cost

Nantucket Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The companys controller, Alan Denney, has recently completed a cost study of the firms material-handling department. The activity measure (independent variable) used in the study was hundreds of pounds of equipment loaded or unloaded at the companys loading dock. Denney compiled the following data.

Units of Activity
Month (hundreds of pounds of equipment loaded or unloaded) Material-Handling Department Costs
January 2,800 $ 12,700
February 2,600 12,300
March 2,300 11,750
April 2,000 11,200
May 3,200 12,100
June 3,400 14,050
July 3,000 13,000
August 2,800 12,400
September 3,600 13,320
October 2,100 11,550
November 2,200 12,350
December 2,400 12,350
Required:
1.

Compute the least-squares regression estimate of the variable- and fixed-cost components in the companys material-handling department costs. (Do not round intermediate calculations. Round "Variable cost per unit" to 2 decimal places and "Monthly fixed cost" to the nearest whole dollar amount.)

Write the least-squares regression equation for the departments costs. (Do not round intermediate calculations. Round "Variable cost per unit" to 2 decimal places and "Monthly fixed cost" to the nearest whole dollar amount.)

Total monthly cost = ? + ?x

3.

Predict the firms material-handling departments costs for a month when 2,750 units of activity are recorded. (Round Variable cost per unit to 2 decimal places and final answer to the nearest whole dollar amount.)

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