Last Minute Cruise Co. has been operating for more than 20 years. The company has recently undergone several major management changes and needs accurate information to plan new cruises. You have been retained as a consultant to provide a cruise planning model. The company’s accounting department provided you with the following data regarding last year’s average costs for 12 cruises on the MS Robyn, a cruise ship that has a maximum capacity of 525 passengers and a crew of 250. All cruises on the MS Robyn are for either 7 or 10 days.
The total cost provided above includes all costs of operating the ship (fuel, maintenance, depreciation, etc.) as well as meals, entertainment, and crew costs.

A. Using the number of passengers as the independent variable, perform a regression analysis to develop the total cost formula for a cruise.
B. How accurate is the model calculated in question A?
C. What are the total fixed costs per cruise? (Round your answer to the nearest cent.)
D. What are the variable costs per passenger? (Round your answer to the nearest cent.)
E. What other independent variable might Last Minute Cruise Co. use to predict total cruise costs? Using regression analysis, develop another total-cost formula based on the new independent variable.
F. Using the best planning model you can develop from the data provided, what is the estimated cost of a 10-day cruise at full capacity of 525 passengers? (Round your answer to the nearestcent.)

  • CreatedMarch 11, 2015
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