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Sunripe Inc. is a highly successful apple grower in the Okanagan. An important share of the companys revenues is attributed to the production and sale

Sunripe Inc. is a highly successful apple grower in the Okanagan. An important share of the companys revenues is attributed to the production and sale of apple juice. Apples store well in refrigerated rooms which allows for a relatively uniform production throughout the year. The following electricity costs have been recorded for 2020:

Month

Litres of Juice Produced

Electricity Costs

January

35,000

$23,400

February

21,000

22,100

March

22,000

19,000

April

24,000

22,450

May

30,000

22,900

June

32,000

23,350

July

40,000

28,000

August

30,000

22,800

September

30,000

23,000

October

28,000

22,700

November

41,000

24,100

December

39,000

24,950

Required:

  1. Use the high-low method to estimate Sunripes electricity cost behavior and express it in equation form.

  1. Use the least-squares regression method to estimate Sunripes electricity cost behavior and express it in equation form.

  1. Using the two methods above, predict the energy cost for a month in which 26,000 liters of apple juice are produced.

  1. Which method would you recommend Sunripe use for estimating its costs? Explain your answer.

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