Warhawk Company produces three products: coffee beans, tea bags, and chai. The following

monthly information is volumes.

April, 2019 May, 2019 June, 2019 July, 2019 August, 2019 September, 2019 October, 2019 November, 2019 December, 2019 January, 2020 February, 2020 March, 2020

available regarding Warhawks manufacturing costs and production

Month

Total Manufacturing Costs

Pounds of coffee beans produced

Number of tea bags produced

Boxes of chai produced

$1,709,880 $1,708,550 $1,667,130 $2,647,000 $1,918,680 $1,907,030 $1,785,650 $1,569,750 $1,698,350 $1,904,000 $1,906,530 $1,596,150

13,800 15,000 13,350 11,250 12,750 7,500 14,780 10,150 14,330 7,500 13,950 10,500 13,830 11,250 12,530 7,900 12,980 8,250 14,250 13,150 13,950 10,500 13,150 12,750

1,500 2,100 2,400 5,400 3,160 3,600 2,100 1,800 2,560 3,160 3,600 1,200

Requirements:

1. Using Excel, prepare a multiple regression analysis to estimate total manufacturing costs

   using coffee, tea bags, and chai. (30 points)

2. What is the cost-estimating equation based on your multiple regression analysis?

   (9 points)

3. How much of the variation in monthly cost is explained by your cost-estimating

   equation? Do you think that this equation does a good job estimating production costs?

   Why or why not. (9 points)

4. Based on the regression output, are you confident that each of the independent variables

   affects the total manufacturing costs? Why or why not? (9 points)

5. Warhawk plans to produce 14,000 pounds of coffee beans, 11,000 teabags, and 1,600

   boxes of chai in May 2020. Using your cost-estimating equation, what is the estimated

   total manufacturing cost for May 2020? (9 points)

6. You have a special-order opportunity (assume that you have sufficient excess capacity to

   complete the order). A customer has offered to buy 500 boxes of chai for $225 per box. You normally sell Chai for $275 per box. Should you accept the order? Why or why not. (9 points)