Cost estimation and using multiple regression:
University Hospital has prepared a schedule of estimated overhead costs for its blood test unit for the coming year on the assumption that production will be 80,000 tests for the year. Costs have been classified as fixed or variable, according to the controller's judgment.
See attached file for full problem description.
<br>See the spreadsheet for the derivation of the cost-estimation equation.
<br>Overhead = ...
This solution prepares a cost-estimate equation, cost estimate and uses multiple regression to estimate overhead costs for a blood test unit.