Solène & Soeurs, located in Toulouse, France, makes high-tech stopwatches in small batches. The company has observed electricity costs in the table at the right over the last six weeks.
For planning purposes, management would like to know the amount of variable electricity cost per unit and the total fixed electricity cost per week.
Required:
1. Prepare a scattergraph plot. (Place electricity costs on the vertical axis and units on the horizontal axis.)
2. Using the least-squares regression method, estimate the variable and fixed elements of electricity cost. Express these estimates in the form $Y = a + bX$.
3. If the company processes 145 units next week, what would be the expected total electricity cost?
Week Units Electricity Cost
1 150 $ 900
2 130 793
3 165 957
4 155 884
5 160 1,008
6 140 868
900 $5,410