Question 2 (4 points) Larry Marks, the plant manager at Super Retailers is attempting to identify the variables that effect weekly sales of a relatively new detergent at his store. Correctly identifying the variables is important to ensure that money is spent in the right channels to boost sales and also for managing costs within the store. After considerable effort and elimination of a number of variables, Larry has identified the dollar amount spent on advertising and the square feet of shelf space allocated to this new product as two potential variables that effect future sales of this detergent. After identifying these variables, Larry has collected data (as shown in the table below) for the past 20 weeks. Larry is not sure about how to proceed from this point. He wants to Question 3 (2 points) Presented below are the factory overhead costs for Wagner Co. for the last six months of the year. Wagner Co. uses the high-low method. Units Month July August September October November December Overhead Cost $24,450 $49,800 $32,400 $44,200 $19,800 $36,680 8,200 15,800 10,600 15,000 5,800 13,200 1. State the estimated overhead cost model for Wagner Co. (1 point) 2. Use the above model to determine the estimated overhead cost at an operating level of 10,000 units. (1 point) Question 2 (4 points) Larry Marks, the plant manager at Super Retailers is attempting to identify the variables that effect weekly sales of a relatively new detergent at his store. Correctly identifying the variables is important to ensure that money is spent in the right channels to boost sales and also for managing costs within the store. After considerable effort and elimination of a number of variables, Larry has identified the dollar amount spent on advertising and the square feet of shelf space allocated to this new product as two potential variables that effect future sales of this detergent. After identifying these variables, Larry has collected data (as shown in the table below) for the past 20 weeks. Larry is not sure about how to proceed from this point. He wants to know if these variables are good estimators of future sales. He has now approached you, the controller, with the following questions. 50 Week Sales (5) Advertising ($) Shelf Space (ft?) 2,090 210 2 1,850 2 05 3 2,450 355 4 1,575 208 5 3,750 610 6 2,015 397 7 4,110 820 8 1,870 400 9 4,877 997 10 2,490 385 115,005 996 12 2,500 13 3,605 885 14 3,480 1012 15 5,500 1135 16 2,995 1,135 17 2,390 837 18 4,890 1860 192785 990 20 4989 2205 49 625 1. Based on the above data and using regression analysis, determine and state the cost estimation model to predict sales. Attach a copy of the regression output. (1 point) 2. State the Rand the t-stat's. Describe what these numbers mean. (2 points) 3. Use the model to forecast sales if Larry expects to spend $840 on advertising and allocate 65 square feet of shelf space to this new product in the 21st week. (1 point)