### 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 Made5,0005,5004,8005,3004,9505,150 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.