Prestige Telephone Company

In: Business and Management

Submitted By ronaldhuffman
Words 344
Pages 2
McDermott Company
Method of Least Squares

McDermott Company is developing a cost formula for its packing activity. Discussion with the workers in the packing department has revealed that packing costs are associated with the number of customer orders, the size of the orders, and the relative fragility of the items (more fragile items must be specially wrapped in bubble wrap and Styrofoam). Data for the past 20 months have been gathered:

|Month |Packing Cost |Number of Orders |Weight of Orders |Num. of Fragile |
| | | | |Orders |
|1 |$45,000 |11,200 |24,640 |1,120 |
|2 |58,000 |14,000 |31,220 |1,400 |
|3 |39,000 |10,500 |18,000 |1,000 |
|4 |35,600 |9,000 |19,350 |850 |
|5 |90,000 |21,000 |46,200 |4,000 |
|6 |126,000 |31,000 |64,000 |5,500 |
|7 |90,600 |20,000 |60,000 |1,800 |
|8 |63,000 |15,000 |40,000 |750 |
|9 |79,000 |16,000 |59,000 |1,500 |
|10 |155,000 |40,000 |88,000 |2,500 |
|11 |450,000 |113,500 |249,700 |11,800 |
|12 |640,000 |150,000 |390,000 |14,000 |
|13 |41,000 |10,000…...

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