Using HP 40gs for Cost Estimation with Linear Regression

Press [APLET] and select Statistics.

Press soft key {RESET} second key on the top and confirm

with {YES} 6th key on the top, and an empty worksheet will be displayed.

Press 5th key on the top to toggle to {2VAR}.

Entering data in HP 40gs:

Enter the the following into the C1

5,000

5,500

4,800

5,300

4,950

5,150

And into C2

120,000

122,100

118,540

122,400

119,100

124,200

Johnson’s fixed cost:

Press [HOME] [MATH]

Press down arrow to highlight {Stat-Two}

Press right arrow and down arrow to highlight {PREDY}

Select {OK}

Display PREDY(

Enter 0 and press [ENTER]

Display 89,449.381 is the Answer.

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

Press down arrow to highlight {Stat-Two}

Press right arrow and down arrow to highlight {PREDY}

Select {OK}

Display PREDY(

Enter 1 and press [ENTER]

Display 89,455.559 is the Answer.

Deduct this with the above fixed cost 89,449.381

6.178 which is the cost for one unit of chair.

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

Press [HOME] [NUM]

Press soft key {STATS}

Press down arrow till we see CORR

The answer is 0.716220427081

0 is worst and 1 is best, so 0.7 is fairly good.

Total costs for 5,400 chairs:

Press [HOME] [MATH]

Press down arrow to highlight {Stat-Two}

Press right arrow and down arrow to highlight {PREDY}

Select {OK}

Display PREDY(

Enter 5400 and press [ENTER]

Display 122,806.907216 is the Answer.

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

Press [HOME] [MATH]

Press down arrow to highlight {Stat-Two}

Press right arrow to highlight {PREDX}

Select {OK}

Display PREDX(

Enter 125,000 and press [ENTER]

Display 5,755.02336448 is the Answer.

This solution is also applicable to HP 38g, HP 39g+, HP 39gs and HP 40g Graphing Calculator.