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The highest estimated value of slope b is

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Unformatted text preview: .808 $ 10.64 $ 8.26 Slope b The highest estimated value of intercept a is approximately $37,864 and lowest is $25,908. The highest estimated value of slope b is approximately $10.64 and lowest is $8.26. 4. Mr. Ladouceur’s figures, 200 people Using linear regression, 200 people MOH Variable $1,883.48 $1,134 Direct Costs $4,200 $4,200 Total Cost $6,083.48 $5,334 To earn a positive contribution margin, the minimum bid for a 200‐person cocktail party would be any amount greater than $6,084. This amount is calculated by multiplying the variable cost per person of $30.42 by the 200 people. At a price above the variable costs of $6,084, Mr. Ladouceur will be earning a contribution margin toward coverage of his fixed costs. 10‐21 (cont’d) Of course, Mr. Ladouceur will consider other factors in developing his bid including (a) an analysis of the competition––vigorous competition will limit Ladouceur’s ability to obtain a higher price (b) a determination of whether or not his bid will set a precedent for lower prices––overall, the prices Mr. Ladouceur charges should generate enou...
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