Using HP 10bII for Cost Estimation with Linear Regression

Johnson’s Chair Company has experienced the following costs for the first 6 months of the year:
# Chairs Made 5,000 5,500 4,800 5,300 4,950 5,150	Total Costs $120,000 $122,100 $118,540 $122,400 $119,100 $124,200

Entering data in HP 10bII:

• [Shift] [C All]
• 5000 [Input] 120,000 [E+]
• 5,500 [Input] 122,100 [E+]
• 4,800 [Input] 118,540 [E+]
• 5,300 [Input] 122,400 [E+]
• 4,950 [Input] 119,100 [E+]
• 5,150 [Input] 124,200  [E+]

Johnson’s fixed cost:

• Press 0 then [Shift] [y,m]
• Display 89,449.381 is the Answer

Johnson’s variable cost (cost to build on chair):

• Press 1 then [Shift] [y,m]
• Display 89,455.559
• Deduct this with the above fixed cost  89,449.381
• 6.178 which is the cost for one unit of chair.
• or Press [Shift] [Swap] to get the same answer

How good is the fit of the linear regression line generated?

• Press 0 then [Shift] [x,r]
• Display -14,480.29
• [Shift] [Swap]
• Display 0.716 and this is the answer

Total costs for 5,400 chairs:

• Enter 5,400 then [Shift] [y,m]
• Display 122,806.907 is the Answer.

Total costs were $125,000, how many chairs:

• Enter 125,000 then [Shift] [x,r]
• Display 5,755.023 is the Answer.

This solution is also applicable to HP 10b Financial Calculator.