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Serenity Living manufactures gas fireplaces for home use. Each unit produced goes through a complex quality control process. The company has observed quality control costs
Serenity Living manufactures gas fireplaces for home use. Each unit produced goes through a complex quality control process. The company has observed quality control costs as follows over the past 16 weeks: Total Quality Week Units Produced Control Costs 1 29 $ 590 2 20 $ 450 3 35 $ 700 4 17 $ 430 5 23 $ 500 6 32 $ 630 7 7 25 $ 543 8 26 $ 554 9 22 $ 480 10 24 $ 510 11 27 $ 567 12 34 $ 670 13 31 $ 618 14 19 $ 425 15 21 $ 467 16 38 $ 655 For planning purposes, the company's management wants to know the amount of variable quality control costs per unit and the total fixed quality control costs per week. Required: 1. Using the least-squares regression method, estimate the variable and fixed elements of the quality control cost. (Round variable cost to 2 decimal places.) Fixed cost Variable cost per unit 2. If the company produces 25 gas fireplaces next week, what are the expected total quality control costs? (Round intermediate and final value to 2 decimal places.) Total expected cost
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