EXAMPLE 1.10 Analyze the Costs of your Business

bcosts

Businesses spend money for many different types of things, and these are often organized into cost centers. Data for a company with 10 different cost centers is summarized in Figure 1.4. Cost center is a categorical variable with 10 possible values. These include salaries, maintenance, research, and seven other cost centers. Annual cost is a quantitative variable that gives the sum of the amounts spent in each cost center.4

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Figure 1.4: FIGURE 1.4 Business cost center data, Example 1.10.