Year Sales (X) in millions Profit (Y) in millions XY X^2 Y^2 2003 10 0.5 5 100 0.25 2004 12 0.75 144 0.5625 2005 14 0.78 10.92 196 0.6084 2006 17 0.45 7.65 289 0.2025 2007 25 0.23 5.75 625 0.0529 1.8225 0.7569 2008 37 1.35 0.87 0.56 49.95 33.06 1369 2009 38 1444 2010 42 23.52 1764 0.3136 2011 62 0.84 52.08 3844 0.7056 2012 74 1.88 139.12 5476 3.5344 ТОTAL 331 8.21 336.05 15251 8.8093
The ABC Company is involved in the production and selling of consumer goods, particularly beauty products such as bath soap and shampoo and had registered a positive profit growth for the last 10 years.
However, the current year seems to be different from those years as the company is expecting a decline in profit; which is estimated to be about 70% below the target. The manager now is in a dilemma … asking himself/herself “What happened, why this decline in profit?” The Manager then asked the company Accountant to give him/her the data on sales and advertising cost for the last 10 years – he/she wants these data to determine whether the company can live without advertising, as advertising cost happens to be substantial.
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