Question - One of Varic Company's products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks:
Week Units Produced Total Glazing Cost
1 8 $ 270
2 5 $ 200
3 10 $ 310
4 4 $ 190
5 6 $ 240
6 9 $ 290
For planning purposes, the company's management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week.
Required:
1. Using the least-squares regression method, estimate the variable and fixed elements of the glazing cost.
2. Express the cost data in (1) above in the form Y = a + bX.
3. If the company processes seven units next week, what would be the expected total glazing cost?