Please help with requirement 2 and 3!
Garvin Corporation manufactures a drink bottle, model CL24. During 2017, Garvin produced 260,000 bottles at a total cost of $1,105,000. Sealy Corporation has offered to supply as many bottles as Garvin wants at a cost of $4.40 per bottle. Garvin anticipates needing 273,000 bottles each year for the next few years. Read the requirements. Requirement 1a. What is the average cost of manufacturing a drink bottle in 2017? How does it compare to Sealy's offer? The average cost of $ 4.25 per bottle is less than Sealy's offer. Requirement 1b. Can Garvin use the answer in requirement 1a to determine the cost of manufacturing 273,000 drink bottles? Explain. Garvin cannot take the average manufacturing cost in 2017 to determine the total cost of manufacturing 273,000 drink bottles. The reason is that some of the total costs are fixed costs and some are variable costs Requirement 2. Garvin'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 = $437,000+ $3.00X. During the years used to estimate the regression equation, the production of drink bottles varied from 249,000 to 283,000. Using this equation, estimate how much it would cost Garvin to manufacture 273,000 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 Garvin to manufacture 273,000 drink bottles, then calculate the cost to purchase the bottles. i Requirements Estimated cost to make the bottles $ Cost to purchase the bottles 2. Garvin'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 = $437,000 + $3.00x During the years used to estimate the regression equation, the production of drink bottles varied from 249,000 to 283,000. Using this equation, estimate how much it would cost Garvin to manufacture 273,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Sealy? 3. What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles
