ks Window Help 35 Thu Jan 25 236 Solved Maria Chavez owns a

ks Window Help \": 35% Thu Jan 25 2:36 Solved. Maria Chavez owns a catering company that ser. High-Low Method I Formula | Example | Manage rk Help Save & Exit Sub Saved Check my wo Required information The following information applies to the questions displayed below Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez\'s business is seasonal, with a heavy schedule during the summer months and holidays and a lighter schedule at other times. One of the major events Chavez\'s customers request is a cocktail party, She offers a standard cocktail party and has estimated the cost per guest as follows: $ 16.00 4.50 9.31 $ 29.81 Food and beverages Labor (0.5 hour $9.00 /hr.) overhead (0.5 hour $18.62/hr Total cost per quest The standard cocktail party lasts three hours and Chavez hires one worker for every that works out to one-half hour of labor per guest. These workers are hired only as needed and are paid only far the hours they actually work. when bidding guest. She is confident about her estimates of the costs of food and beverages and labor but is not as comfortable with the estimate of overhead cost. The $18.62 overhead cost per labor-hour was determined by dividing total overhead expenses for the last 12 months by total labor-hours for the same period. Monthly data concerning overhead costs and labor-hours follow six guests, so on cocktail parties. Chavez adds a 11% markup to yield a price of about $33 per FI F6 F7 FB F4 F5

Solution

Formula for Least squares regression : Y = a + bX

where, Variable unit = b = n . sum(xy) - sumx . sumy / n . sum x² - (sum x)²

and fixed unit = a = sum y - b (sum x) / n

Now, calculate the values :

Variable cost = b = n . sum(xy) - sum x . sum y / n . sum x² - (sum x)²

= 12 * 3351600000 - 58400 * 662000 / 12 * 317080000 - (58400)²

b = 1558400000 / 394400000 = 3.9513

and fixed cost = a = [sum y - b (sum x)] / n

a = (662000 - 3.9513 * 58400 ) / 12 = 35937

Thus, the equation become : Y = 35937 + 3.9513 X

x	y	x2	xy
2300	43000	5290000	98900000
2800	47000	7840000	131600000
3000	48000	9000000	144000000
4200	52000	17640000	218400000
4500	55000	20250000	247500000
5500	59000	30250000	324500000
6500	62000	42250000	403000000
7500	65000	56250000	487500000
7000	63000	49000000	441000000
4500	56000	20250000	252000000
4100	52000	16810000	213200000
6500	60000	42250000	390000000
sum 58400	sum 662000	sum317080000	sum3351600000