### 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 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 12c:

• [f] [REG]

• 120,000 [ENTER] 5,000 [+]

• 122,100 [ENTER] 5,500 [+]

• 118,540 [ENTER] 4,800 [+]

• 122,400 [ENTER] 5,300 [+]

• 119,100 [ENTER] 4,950 [+]

• 124,200 [ENTER] 5,150 [+]

Johnson’s fixed cost (Even when no chair was build):

• Press 0 then [g] [y,m]

• Display 89,449.381 is the Answer

Johnson’s variable cost (cost of a single chair):

• Press 1 then [g] [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.

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

• Press 0 then [g] [y,m]

• Press 1 then [Shift] [y,m]

• Press [x<>y]

• Display 0.716 this is the answer

Total costs for 5,400 chairs:

• Enter 5,400 then press [g] [y,m]

• Display 122,806.907 is the Answer.

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

• Enter 125,000 then press [g] [x,m]

• Display 5,755.023 is the Answer.