1. Sara Fox has started her own company, Foxy Shirts, which manufacturesimprinted shirts for special occasions. Since she has just begun this operation,
she rents the equipment from a local printing shop when necessary. The cost of
using the equipment is $250. The materials used in one shirt cost $10, and Sara
can sell these for $15 each.
a. If Sara sells 20 shirts, what will her total revenue be?
b. If Sara sells 30 shirts, what will her total variable cost be?
c. How many shirts must Sara sell to break even?
2. Average starting salaries for students using a placement service at a university
have been steadily increasing. A study of the last four graduating classes
indicates the following average salaries: $30,000, $32,000, $34,500, and
$36,000 (last graduating class). Using a simple exponential smoothing model
with α = 0.25, predict the starting salary for the next graduating class. Assume
the initial forecast was $30,000 (the forecast and actual were the same).
3. Write a short note on regression analysis in your own words.
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