regression project 2
Warhawk Company produces three products: coffee beans, tea bags, and chai. The following monthly information is available regarding Warhawk’s manufacturing costs and production volumes.
|
Month |
Total Manufacturing Costs |
Pounds of coffee beans produced |
Number of tea bags produced |
Boxes of chai produced |
|
April, 2017 |
$1,709,880 |
3,800 |
30,000 |
750 |
|
May, 2017 |
$1,708,550 |
3,350 |
22,500 |
1,050 |
|
June, 2017 |
$1,667,130 |
2,750 |
15,000 |
1,200 |
|
July, 2017 |
$2,647,000 |
4,780 |
20,300 |
2,700 |
|
August, 2017 |
$1,918,680 |
4,330 |
15,000 |
1,580 |
|
September, 2017 |
$1,907,030 |
3,950 |
21,000 |
1,800 |
|
October, 2017 |
$1,785,650 |
3,830 |
22,500 |
1,050 |
|
November, 2017 |
$1,569,750 |
2,530 |
15,800 |
900 |
|
December, 2017 |
$1,698,350 |
2,980 |
16,500 |
1,280 |
|
January, 2018 |
$1,904,000 |
4,250 |
26,300 |
1,580 |
|
February, 2018 |
$1,906,530 |
3,950 |
21,000 |
1,800 |
|
March, 2018 |
$1,596,150 |
3,150 |
25,500 |
600 |
Requirements:
- Using Excel, prepare a multiple regression analysis to determine the unit cost of each product. (20 points)
- What is the cost-estimating equation based on your multiple regression analysis?
- How much of the variation in monthly cost is explained by your cost-estimating equation? Do you think that this equation does a good job estimating production costs? Why or why not. (8 points)
- Warhawk plans to produce 4,000 pounds of coffee beans, 27,000 teabags, and 800 boxes of chai in May 2018. Using your cost-estimating equation, what is the estimated total manufacturing cost for May 2018? (8 points)
- You have a special-order opportunity (assume that you have sufficient excess capacity to complete the order). A customer has offered to buy 500 boxes of chair for $425 per box. Should you accept the order? Why or why not. (6 points)
(8 points)
Submission Instructions:
- Submit your Excel file that contains your multiple regression analysis.
- Submit your Word file that contains your answers to requirements 2, 3, 4, & 5.
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