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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
(Least squares) Bon Voyage provides charter cruises in the eastern Caribbean. Tina Louise, the owner, wants to understand how her labor costs change per month. She recognizes that the cost is neither strictly fixed nor strictly variable. She has gathered the following information and has identified two potential predictive bases, number of charters and gross receipts:
| Â | Â |
Number of |
Gross |
|
Month |
Labor Costs |
Charters |
Receipts ($000) |
|
January |
$ 8,000 |
10 |
$ 12 |
|
February |
9,200 |
14 |
18 |
|
March |
12,000 |
22 |
26 |
|
April |
14,200 |
28 |
36 |
|
May |
18,500 |
40 |
60 |
|
June |
28,000 |
62 |
82 |
|
July |
34,000 |
100 |
120 |
|
August |
30,000 |
90 |
100 |
|
September |
24,000 |
80 |
96 |
Using the least squares method, develop a labor cost formula using
a. number of charters
b. gross receipts
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