Harborside Corp. produces swimsuits. Presented is the monthly information for th
ID: 3332426 • Letter: H
Question
Harborside Corp. produces swimsuits. Presented is the monthly information for the last 15 months:
Total Manufacturing Costs
Total Swimsuits produced
Boardshorts Produced
Bikinis Produced
January-16
28,431
118
51
68
February-16
31,945
169
34
135
March-16
35,488
142
74
68
April-16
35,787
166
61
105
May-16
42,175
196
122
75
June-16
31,884
149
47
101
July-16
30,021
122
54
68
August-16
40,455
189
71
118
September-16
35,129
172
51
122
October-16
37,382
159
74
85
November-16
31,201
132
58
74
December-16
40,794
176
81
95
January-17
36,253
169
61
108
February-17
38,880
182
68
115
March-17
25,414
105
41
71
2. Use simple regression analysis to develop a cost-estimating equation for total manufacturing
costs. A customer has offered to purchase 75 boardshorts for $195 per item. Management has asked
your advice regarding whether or not to accept the offer. What advice do you have for management?
Harborside Corp. produces swimsuits. Presented is the monthly information for the last 15 months:
Total Manufacturing Costs
Total Swimsuits produced
Boardshorts Produced
Bikinis Produced
January-16
28,431
118
51
68
February-16
31,945
169
34
135
March-16
35,488
142
74
68
April-16
35,787
166
61
105
May-16
42,175
196
122
75
June-16
31,884
149
47
101
July-16
30,021
122
54
68
August-16
40,455
189
71
118
September-16
35,129
172
51
122
October-16
37,382
159
74
85
November-16
31,201
132
58
74
December-16
40,794
176
81
95
January-17
36,253
169
61
108
February-17
38,880
182
68
115
March-17
25,414
105
41
71
Explanation / Answer
Manufacturing cost = 11230.61 + 372.88* Swim suits -165.616*Boardshorts - 259.236*Bikinis
Manufacturing cost of boardshorts is negative. So Management should not accept the offer.
SUMMARY OUTPUT Regression Statistics Multiple R 0.970262 R Square 0.941409 Adjusted R Square 0.925429 Standard Error 1326.494 Observations 15 ANOVA df SS MS F Significance F Regression 3 310990597 1.04E+08 58.91359 4.6E-07 Residual 11 19355447.96 1759586 Total 14 330346044.9 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 11230.61 2353.845814 4.771176 0.00058 6049.834 16411.39 6049.834 16411.39 Total Swimsuits produced 372.8847 208.9277771 1.784754 0.101872 -86.9622 832.7317 -86.9622 832.7317 Boardshorts Produced -165.616 214.7250962 -0.77129 0.456782 -638.223 306.9907 -638.223 306.9907 Bikinis Produced -259.236 215.4308584 -1.20334 0.254105 -733.396 214.9245 -733.396 214.9245Related Questions
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