1 2 Assessment 2 Part 1: Interpretation of Regression Results WN Scenario 4 5 6 7 8 Your company provides a variety of delivery services. Management wants to know the volume of a particular delivery that would generate $11,000 per month in operating profits before taxes. The company charges $22 per delivery. The controller's office has estimated overhead costs at $9,900 per month for fixed costs and $12 per delivery for variable costs. You believe that the company should use regression analysis. Your analysis shows the results to be: Monthly overhead=$26,501+$10.70 per Your estimate was based on the following data: Month Overhead Costs Number of Deliveries 1 $ 159,630.00 12510 2 183,990 15060 3 142,860 11430 194.430 15450 5 151,890 12180 12 6 150,120 11970 7 192,600 15660 14 8 154,080 12630 9 141.030 11250 10 184,800 15300 17 11 203,490 12780 18 12 183,120 14580 13 180,630 14730 9 10 11 13 15 16 19 REQUIRED The company controller is somewhat surprised that your cost estimates are so different from the controller's. You have been asked to recheck your work and see if you can figure out the difference between your results and the controller's results. 1. Analyze the data and your results. Explain your reasons for supporting or rejecting your cost equation. Show all calculations. 2. Write a report that informs management about the correct volume that will generate $11,000 per month in operating profits before taxes