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    Regression Methods to Develop a Function

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    A facility manager asked for information to help in forecasting handling costs. The following printout was generated using the least squares regression method:
    Fixed cost: $2550
    Variable cost per unit: 1.85
    Activity variable: units of production volume

    a. Using the info from the printout, develop a cost function that can be used to estimate handling costs at different volume levels.
    b. Estimate handling costs if the expected production for next month is 20,000 units.

    © BrainMass Inc. brainmass.com March 4, 2021, 5:41 pm ad1c9bdddf
    https://brainmass.com/business/accounting/regression-methods-develop-function -6205

    Solution Preview

    In this problem:
    <br>y = Handling costs.
    <br>a = Fixed cost = $2,550.
    <br>b = Variable ...

    Solution Summary

    This solution sets up a cost function.

    $2.49

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