Using HP 12c or HP 12c Platinum for Cost Estimation with Linear Regression
Johnson’s Chair Company has experienced the following costs for the first 6 months of the year:
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 12c:
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[f] [REG]
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120,000 [ENTER] 5,000 [+]
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122,100 [ENTER] 5,500 [+]
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118,540 [ENTER] 4,800 [+]
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122,400 [ENTER] 5,300 [+]
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119,100 [ENTER] 4,950 [+]
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124,200 [ENTER] 5,150 [+]
Johnson’s fixed cost (Even when no chair was build):
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Press 0 then [g] [y,m]
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Display 89,449.381 is the Answer
Johnson’s variable cost (cost of a single chair):
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Press 1 then [g] [y,m]
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Display 89,455.559
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Deduct this with the above fixed cost 89,449.381
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6.178 which is the cost for one unit of chair.
How good is the fit of the linear regression line generated?
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Press 0 then [g] [y,m]
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Press 1 then [Shift] [y,m]
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Press [x<>y]
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Display 0.716 this is the answer
Total costs for 5,400 chairs:
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Enter 5,400 then press [g] [y,m]
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Display 122,806.907 is the Answer.
Total costs were $125,000, how many chairs:
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Enter 125,000 then press [g] [x,m]
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Display 5,755.023 is the Answer.