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:
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[Shift] [C All]
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5000 [Input] 120,000 [E+]
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5,500 [Input] 122,100 [E+]
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4,800 [Input] 118,540 [E+]
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5,300 [Input] 122,400 [E+]
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4,950 [Input] 119,100 [E+]
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5,150 [Input] 124,200 [E+]
Johnson’s fixed cost:
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Press 0 then [Shift] [y,m]
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Display 89,449.381 is the Answer
Johnson’s variable cost (cost to build on chair):
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Press 1 then [Shift] [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.
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or Press [Shift] [Swap] to get the same answer
How good is the fit of the linear regression line generated?
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Press 0 then [Shift] [x,r]
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Display -14,480.29
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[Shift] [Swap]
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Display 0.716 and this is the answer
Total costs for 5,400 chairs:
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Enter 5,400 then [Shift] [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 [Shift] [x,r]
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Display 5,755.023 is the Answer.
This solution is also applicable to HP 10b Financial Calculator.