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ORCO, a cooperative of organic family-owned farms outside of Madison, Wisconsin, has recently started a fresh produce club to provide support to the group's member

ORCO, a cooperative of organic family-owned farms outside of Madison, Wisconsin, has recently started a fresh produce club to provide support to the group's member farms and to promote the benefits of eating organic, locally produced food to the nearby suburban community. Families pay a seasonal membership fee of $97 and place their orders a week in advance for a price of $46 per order. In turn, ORCO delivers fresh-picked seasonal local produce to several neighbourhood distribution points. Seven hundred families joined the club for the first season, but the number of orders varied from week to week. Daniel Craig has run the produce club for the first 10-week season. Before becoming a farmer, Daniel had been a business major in college, and he remembers a few things about cost analysis. In planning for next year, he wants to know how many orders will be needed each week for the club to break even, but first he must estimate the club's fixed and variable costs. He has collected the following data over the club's first 10 weeks of operation:

Week Number of orders per week Total weekly costs
1 353 19005
2 380 22065
3 424 23100
4 475 23404
5 445 22671
6 495 23656
7 464 23402
8 490 23712
9 545 24121
10 520 23812

3. Daniel uses his computer to calculate the following regression formula:

Total weekly costs = $13,042 + ($24.462 * Number of weekly orders)

Draw the regression line on your graph. (0.5 marks)

4. Is the regression line plausible (makes sense)? Explain. (0.5 marks)

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