Temperance,Inc.is studying marketing cost and sales volume,and has generated the following information by use of a scatter diagram and a least-squares regression analysis:
Temperance is now preparing an estimate for monthly sales of 18,000 units.On the basis of the data presented,compute the most accurate sales forecast possible.
A)$159,500.
B)$162,000.
C)$164,900.
D)$167,400.
E)An amount other than those listed abovE.

Question

Temperance,Inc.is studying marketing cost and sales volume,and has generated the following information by use of a scatter diagram and a least-squares regression analysis: 
Temperance is now preparing an estimate for monthly sales of 18,000 units.On the basis of the data presented,compute the most accurate sales forecast possible.
A)$159,500. 
B)$162,000. 
C)$164,900. 
D)$167,400. 
E)An amount other than those listed abovE.

Quizplus · Accepted Answer

Using the regression equation generated by the scatter diagram, we can estimate the monthly sales for 18,000 units as follows:
Sales = 10897.5 + (2.48 × 18000)
Sales = 10897.5 + 44640
Sales = $164,900
Therefore, the most accurate sales forecast possible is $164,900, which is answer choice C.