Vintage Coffee Co. produces three products: coffee beans, teabags, and chai. The following monthly information is availableregarding Vintage's manufacturing costs and production volumes.
| Month | Total Manufacturing Costs | Pounds of coffee beans produced | Number of tea bags produced | Boxes of chai produced |
|---|
| April 2019 | $1,709,880 | 13,800 | 15,000 | 1,500 |
| May 2019 | $1,708,550 | 13,350 | 11,250 | 2,100 |
| June 2019 | $1,667,130 | 12,750 | 7,500 | 2,400 |
| July 2019 | $2,647,000 | 14,780 | 10,150 | 5,400 |
| Aug 2019 | $1,918,680 | 14,330 | 7,500 | 3,160 |
| Sept 2019 | $1,907,030 | 13,950 | 10,500 | 3,600 |
| Oct 2019 | $1,785,650 | 13,830 | 11,250 | 2,100 |
| Nov 2019 | $1,569,750 | 12,530 | 7,900 | 1,800 |
| Dec 2019 | $1,698,350 | 12,980 | 8,250 | 2,560 |
| Jan 2020 | $1,904,000 | 14,250 | 13,150 | 3,160 |
| Feb 2020 | $1,906,530 | 13,950 | 10,500 | 3,600 |
| Mar 2020 | $1,596,150 | 13,150 | 12,750 | 1,200 |
1. Using Excel, prepare a multiple regression analysis toestimate total manufacturing costs using coffee, tea bags, andchai.
2. What is the cost-estimating equation based on your multipleregression analysis?
3. How much of the variation in monthly cost is explained byyour cost-estimating equation? Do you think that this equation doesa good job estimating production costs? Why or why not.
4. Based on the regression output, are you confident that eachof the independent variables affects the total manufacturing costs?Why or why not?
5. Vintage plans to produce 14,000 pounds of coffee beans,11,000 teabags, and 1,600 boxes of chai in May 2020. Using yourcost-estimating equation, what is the estimated total manufacturingcost for May 2020?
6. You have a special-order opportunity (assume that you havesufficient excess capacity to complete the order). A customer hasoffered to buy 500 boxes of chai for $225 per box. You normallysell chai for $275 per box. Should you accept the order? Why or whynot.
