Using HP 9g for Cost Estimation with Linear Regression

Power on the HP9g and press [2nd] [Reset] and select {Y} to reset the calculator. Then Press [MODE] and select {1STAT}, select {REG}, select {LIN} to set to Linear mode.

Use the following sequence to enter the statistical data into the calculator:

• Press [DATA] and select {DATA-INPUT}
• Prompted X1=
• Enter 5,000
• Press [Down Arrow]
• Prompted Y1=
• Enter 120,000
• Prompted X2=
• Enter 5,500
• Press [Down Arrow]
• Prompted Y2=
• Enter 122,100
• Prompted X3=
• Enter 4,800
• Press [Down Arrow]
• Prompted Y3=
• Enter 118,540
• Prompted X4=
• Enter 5,300
• Press [Down Arrow]
• Prompted Y4=
• Enter 122,400
• Prompted X5=
• Enter 4,950
• Press [Down Arrow]
• Prompted Y5=
• Enter 119,100
• Prompted X6=
• Enter 5,150
• Press [Down Arrow]
• Prompted Y6=
• Enter 124,200
• Press [Down Arrow]
• Prompted X7=

Press [2nd] [STATVAR]

What is Johnson’s fixed cost:

a = 89,449.38144 (this is the fixed cost).

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

b = 6.177319588 (this is the variable cost).

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

r = 0.716220427 (this is Correlation coefficient).

What is the total costs to build 5,400 chairs?

• Press [2nd] [STATVAR]
• Select {y´}
• Prompted y´( )
• Enter 5400 and press [Enter]
• Display 122,806.9072 (is the answer).

Total costs were $125,000, how many chairs can they build?

• Press [2nd] [STATVAR]
• Select {x´}
• Prompted x´( )
• Enter 125000 and press [Enter]
• Display 5,755.023364 (is the answer).