An important application of regression analysis in accounting isin the estimation of cost. By collecting data on volume and costand using the least squares method to develop an estimatedregression equation relating volume and cost, an accountant canestimate the cost associated with a particular manufacturingvolume. Consider the following sample of production volumes andtotal cost data for a manufacturing operation. Production Volume(units) Total Cost ($) 400 4,700 450 5,700 550 6,100 600 6,600 7007,100 750 7,700 Compute b1 and b0 (to 1 decimal). b1 b0 Completethe estimated regression equation (to 1 decimal). = + x What is thevariable cost per unit produced (to 1 decimal)? $ Compute thecoefficient of determination (to 3 decimals). Note: report r2between 0 and 1. r2 = What percentage of the variation in totalcost can be explained by the production volume (to 1 decimal)? %The company's production schedule shows 500 units must be producednext month. What is the estimated total cost for this operation (tothe nearest whole number)? $
