The Management of Archie Corporation Would Like to Better Understand

question 17

Essay

The management of Archie Corporation would like to better understand the behavior of the company's warranty costs.Those costs are listed below for a number of recent months:
Management believes that warranty cost is a mixed cost that depends on the number of product returns.
Required:
Estimate the variable cost per product return and the fixed cost per month using the least-squares regression method.
$$\begin{array} { l c c } & \text { Product Returns } & \text { Warranty Cost } \\\text { May .............. } & 30 & \$ 3,929 \\\text { June ............. } & 33 & \$ 3,975 \\\text { July .............. } & 26 & \$ 3,859 \\\text { August .......... } & 36 & \$ 3,996 \\\text { September....... } & 42 & \$ 4,072 \\\text { Oetober......... } & 34 & \$ 3,963 \\\text { November....... } & 35 & \$ 3,976 \\\text { December ....... } & 39 & \$ 4,022\end{array}$$

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Definitions:

Function

In programming, a named section of a code that performs a specific task; in mathematics, a relation between a set of inputs and a set of permissible outputs.

Insert Options

Features or commands in software that allow users to add new data or elements into documents, databases, or other applications.

AVERAGE Function

A function in spreadsheet programs that calculates the mean value of a range of cells, providing a summary statistic of the data set.

Proofing Group

Tools in software applications used for reviewing and correcting text, including spell check and grammar check.