Professor John Morton has just been appointed chairperson of the Finance Department at Westland University....
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Accounting
Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the departments cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms:
Term
Number of Sections Offered
Total Cost
Fall, last year
4
$
10,000
Winter, last year
6
$
14,000
Summer, last year
2
$
7,000
Fall, this year
5
$
13,000
Winter, this year
3
$
9,500
Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes.
2-a. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101.
2-b. Express these estimates in the form Y = a + bX.
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