Exam 3: Determining How Costs Behave

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A positive slope of a regression line indicates that total costs are lower for higher values of the cost driver.

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Answer the following questions using the information below: Stosur Courtside Caterers is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations. Sales (5000 microwave ovens) \ 1350000 Cost of goods sold 540000 Store manager's salary per year 75000 Operating costs per year 225000 Advertising and promotion per year 25000 Commissions (4\% of sales) 67500 -What are the estimated total costs if Stosur expects to sell 6500 units next year?

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