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    Production costs for textbooks, a linear regression equation

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    See attached file for clarity.

    Data Item Quantity (# of Books Produced) Total Cost of Production
    1 2 $30
    2 5 $40
    3 8 $73
    4 10 $100
    5 11 $130
    6 12 $90
    7 14 $150
    8 15 $160
    9 16 $160
    10 17 $180
    11 18 $240
    12 19 $280
    13 20 $180
    14 21 $181
    15 22 $185
    16 23 $190
    17 24 $200
    18 25 $200
    19 26 $275
    20 28 $215
    21 30 $220
    22 31 $221
    23 32 $225
    24 33 $200
    25 34 $205
    26 35 $206
    27 36 $210
    28 37 $200
    29 38 $388
    30 40 $275
    31 41 $400
    32 42 $428
    33 43 $413
    34 44 $450
    35 45 $460
    36 46 $450
    37 47 $471
    38 48 $500
    39 49 $476
    40 50 $450
    Use these sums to verify your data entry into Excel 1,137 $10,104

    If there any necessary assumptions please state and include.

    1. Please describe, with words and numerical coefficients, your model for the total cost function (again assuming a linear model).

    2. How much variance in total cost is explained by estimating it with number of units manufactured using this linear model?

    3. What is your best point-estimate (single number) for fixed cost? What about variable cost of producing 20 textbooks (again, single number)?

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    https://brainmass.com/statistics/regression-analysis/production-costs-textbooks-linear-regression-equation-343129

    Attachments

    Solution Preview

    Please see the attached files.

    To answer the question we have to find a linear regression equation assuming the total cost is linearly related to the number of books produced.
    This can be done by using MS excel as follows:
    Copy the data in a excel sheet.
    Draw the scatter diagram by taking X values as the number of books produced and Y values as the cost of production.
    Then ...

    Solution Summary

    Production costs for textbooks and a linear regression equation is examined.

    $2.19

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