Question
Odie Company manufactures a popular brand of cat repellant known as Cat-B-Gone, which it sells in gallon-size bottles with a spray attachment. The majority of
Odie Company manufactures a popular brand of cat repellant known as Cat-B-Gone, which it sells in gallon-size bottles with a spray attachment. The majority of Odies business comes from orders placed by homeowners who are trying to keep neighborhood cats out of their yards. Odies operating information for the first six months of the year follows: Month Number of Bottles Sold Operating Cost January 1,000 $ 8,000 February 1,100 7,700 March 1,300 9,900 April 2,000 14,000 May 2,400 17,250 June 3,000 20,000
Required:
3. Using the high-low method, calculate Odies total fixed operating costs and variable operating cost per bottle.
4. Perform a least-squares regression analysis on Odies data.
5. Determine how well this regression analysis explains the data.
6. Using the regression output, create a linear equation (y = a + bx) for estimating Odies operating costs.
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