Sherri Cola Company Has Developed a Regression Model Relating Its

question 49

Essay

Sherri Cola Company has developed a regression model relating its sales (y in $10,000s) with four independent variables.The four independent variables are price per unit (PRICE, in dollars), competitor's price (COMPRICE, in dollars), advertising (ADV, in $1000s), and type of container used (CONTAIN; 1 = Cans and 0 = Bottles).Part of the regression results is shown below.Here, n = 25. $$\begin{array} { l l l } & \text { Coefficients } & \text { Stcanda } \\\text { Intercept } & 443.143 & \\\text { PRICE } & - 57.170 & 20.426 \\\text { COMPRICE } & 27.681 & 19.991 \\\text { ADV } & 0.025 & 0.023 \\\text { CONTAIN } & - 95.353 & 91.027\end{array}$$ ​
a.
If the manufacturer uses can containers, his price is $1.25, advertising cost is $200,000, and his competitor's price is $1.50, what is your estimate of his sales? Give your answer in dollars.
b.
Test to see if there is a significant relationship between sales and unit price. Let α = .05.
c.
Test to see if there is a significant relationship between sales and advertising. Let α = .05.
d.
Is the type of container a significant variable? Let α = .05.
e.
Test to see if there is a significant relationship between sales and competitor's price.
Let α = .05.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable operational conditions.

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated conditions.

Time Of Purchase

The specific point in time when goods or services are bought, which can influence the cost and availability.