### 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]

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]

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

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]

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]