6. 30 points, 10 points each
It is generally accepted that by increasing the number of units it produces, a manufacturer can often decrease its cost per unit. The following relates the manufacturing cost per unit to the number of units produced:
Number of units Cost per unit
10 9.4
20 9.2
50 9.0
100 8.5
150 8.1
200 7.4
A. Predict the cost per unit when the number of units produced is 125.
B. Estimate the variance of the cost predicted in A.
C. Give an interval that, with 99 percent confidence, will contain the cost per unit when a production run of 110 units is used.