Eastwood Consulting Rents a Photocopy Machine for a Monthly Rental

question 40

Essay

Eastwood Consulting rents a photocopy machine for a monthly rental of $100 plus $0.02 per copy. Photocopier usage varies from month to month depending primarily on the type and volume of consulting reports completed each month. Photocopier usage and cost data for the past several months are as follows:
Month Number of Copies Rental Cost
January 11,498 $330
February 14,649 392
March 12,719 354
April 10,347 307
May 16,114 422
June 12,648 353
The accountant for Eastwood Consulting would like to develop a budget for July's photocopier Rental cost. Would regression analysis be an appropriate technique for estimating the cost function? Why or why not?

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Definitions:

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