Question

Please note, for questions (b) the shipping expense is NOT $3200, and for (c), the answer is NOT $8000 which is shown below with the RED "x". I am looking for those two answers.

QUESTION 6 Partially correct Mark 3.57 out of 5.00 F Flag question Selecting a Basis for Predicting Shipping Expenses (Requires Computer Spreadsheet*) Boom Company assembles and sells portable speaker systems in the midwest. In an effort to improve the planning and control of shipping expenses, management is trying to determine which of three variables-units shipped, weight shipped, or sales value of units shipped-has the closest relationship with shipping expenses. The following information is available: Weight Sales Value of Shipping Units Shipped Shipped (lbs.) Units Shipped Expenses 5200,000 8.960 220,000 12.320 160,000 10,400 228,000 16,640 280,000 13.760 320,000 13.120 Month May June 6,000 10,000 8,000 14.000 12.000 9,000 9.300 12.000 12,150 15,000 10,500 12,000 August September October Required a. With the aid of a spreadsheet program, determine whether units shipped, weight shipped, or sales value of units shipped has the closest relationship with shipping expenses Complete the r-squared values between each possible independent variable and shipping expenses: Round answers to two decimal places Units shipped 0.92 Weight shipped 0.59 Sale value 0.23 Based on the coefficient of determination, units shipped has the closest relationship with shipping expenses. b. Using the independent variable that appears to have the closest relationship to shipping expenses, develop a cost-estimating equation for total monthly shipping expenses. Round answers to two decimal places Shipping expenses 3.200 X 0.9 X c. Use the equation developed in requirement (b) to predict total shipping expenses in a month when 5,000 units, weighing 7,000 Ibs., with a total sales value of $114,000 are shipped Round answers to two decimal places 8,000 Check

Answer 1

Part B)
We will use high low method to compute variable cost per unit, Fixed cost and then arrive the equation.
The formula for calculating variable cost per unit =
( Total shipping expenses for highest units - Total shipping expenses for lower units ) / (Highest units - Lowest units)
Variable shipping expenses per unit = (16640-8960) / (14000-6000)	0.96
Fixed shipping expenses = Total shipping expenses at highest units - Total variable shipping expenses at highest units
16640 - 0.96*14000
3200
Or try like this because there it has taken 0.9 where it shown tick mark
16640-0.90*14000
$                                                                                                                                                                                4,040.00
Shipping expenses = $ 4040 + $0.9 X
Part c )
Based on the equation derived In part b
The total shipping expenses can be arrived as follows :
4040 + 0.9*5000
$                                                                                                                                                                                8,540.00