Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company's stores are listed below for the past six months.
| Month |
Total Hours
of Operation |
Total Utility
Cost |
| January |
|
550 |
|
$ |
3,240 |
|
| February |
|
600 |
|
|
3,400 |
|
| March |
|
700 |
|
|
3,800 |
|
| April |
|
500 |
|
|
3,200 |
|
| May |
|
450 |
|
|
2,700 |
|
| June |
|
400 |
|
|
2,600 |
|
|
1. Use the high-low method to estimate the cost behavior for the store's utility costs. Express the cost behavior in formula form. Y=a + bX.
2. Use least-squares regression to estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form. Y = a +bX. Do not round intermediate calculations. Round coefficient of X to 2 decimal places and other answer to nearest whole dollar.
3. During July, the store will be open 300 hours. Predict the store's total utility cost for July using each cost estimation method employed in requirements 1 and 2.
High Low Method --> $_____
Least-Square Regression --> $_____