the dataset for operating expenditures is not provided, we will assume the operating

expenditures for the regression analysis. Let's proceed with the regression analysis
using assumed operating expenditures and total production costs.
Assuming the operating expenditures are as follows:
Operating Expenditure (RM 0000):

 Raw Material Cost: 20

 Labor Cost: 10
 Farming Cost: 5
 Energy Cost: 8

Total Production Cost (RM 0000):

 60
 65
 70
 75
 80
 85
 90
 95
 100
 105

We will now perform the regression analysis using the assumed operating
expenditures and total production costs.
Step 1: Set up the regression model: We will use the following regression equation:
Total Production Cost = β0 + β1 * Raw Material Cost + β2 * Labor Cost + β3 *
Farming Cost + β4 * Energy Cost + ε
Step 2: Perform the regression analysis: Using a statistical software like Microsoft
Excel, we can obtain the regression output. The regression output will provide the
estimated coefficients (β0, β1, β2, β3, and β4) and their statistical significance.
Step 3: Interpret the coefficient estimates: The coefficient estimates represent the
impact of each operating expenditure on the total production cost.
β0 (Intercept): This represents the estimated total production cost when all operating
expenditures are zero. It captures the fixed costs and other factors not included in the
model.
β1 (Raw Material Cost): This coefficient estimates the impact of the raw material cost
on the total production cost, holding other variables constant.
β2 (Labor Cost): This coefficient estimates the impact of the labor cost on the total
production cost, holding other variables constant.
β3 (Farming Cost): This coefficient estimates the impact of the farming cost on the
total production cost, holding other variables consta
β4 (Energy Cost): This coefficient estimates the impact of the energy cost on the total
production cost, holding other variables constant.
Step 4: Test for individual significance: To test the individual significance of each
independent variable, we will look at the p-values associated with each coefficient
estimate. If the p-value is less than the significance level (5% in this case), we can
conclude that the variable has a statistically significant impact on the total production
cost.
Based on the regression analysis results, we can determine which operating
expenditure(s) of Farm Fresh Milk Sdn. Bhd. are statistically significant in affecting its
total production cost.
Supermarket Chains  |  FRESH MILK  |  FLAVOURED MILK  |  PLANT BASED MILK
Aeon                          |     66.9     |       61.3           |         52.3
Aeon                          |     73.1     |       66.1           |         58.7
Aeon                          |     64.1     |       70.6           |         63.3
Aeon                          |     75.3     |       67.4           |         63.0
Aeon                          |     71.0     |       63.6           |         57.9
Aeon                          |     68.7     |       63.3           |         50.6
Aeon                          |     67.1     |       57.8           |         51.5
Aeon                          |     75.0     |       66.5           |         57.4
Aeon                          |     55.4     |       57.7           |         65.1
JAYA GROCER        |     59.3     |       66.2           |         51.0
JAYA GROCER        |     70.0     |       59.4           |         50.5
JAYA GROCER        |     60.1     |       66.0           |         56.0
JAYA GROCER        |     66.0     |       60.5           |         64.4
JAYA GROCER        |     70.7     |       56.1           |         55.5
JAYA GROCER        |     66.3     |       71.6           |         51.9
JAYA GROCER        |     73.5     |       62.3           |         59.5
JAYA GROCER        |     55.0     |       72.4           |         51.4
JAYA GROCER        |     59.3     |       59.2           |         57.7
LULU                         |     65.0     |       70.9           |         50.4
LULU                         |     64.1     |       68.6           |         52.7
LULU                         |     55.7     |       56.2           |         64.2
LULU                         |     67.3     |       71.8           |         63.2
LULU                         |     67.0     |       55.6           |         57.2
LULU                         |     55.1     |       56.7           |         58.6
LULU                         |     61.9     |       68.4           |         50.8
LULU                         |     55.5     |       60.7           |         62.1
LULU                         |     58.8     |       64.7           |         55.3
LULU                         |     74.0     |       58.4           |         64.7
The recent business performance of Farm Fresh Milk Sdn. Bhd. has been negatively
affected, resulting in a lower net profit for the financial year 2023 (FY2023). This
issue can be attributed to two possible causes: an increase in input costs, including
key dairy raw materials, labor costs, high farming costs, and high energy costs.
Increase in input costs: The rising costs of key dairy raw materials can significantly
impact Farm Fresh Milk's profitability. If the cost of raw materials such as milk,
additives, and other ingredients used in their products increases, it directly affects the
production cost and reduces profit margins.
Labor costs, farming costs, and energy costs: Farm Fresh Milk Sdn. Bhd. stated in
their filing with Bursa Malaysia that net profit dropped due to an increase in labor
costs, high farming costs, and high energy costs. Higher labor costs may arise from
increased wages or additional workforce required for production. High farming costs
could result from various factors like the cost of animal feed, veterinary care, and
farm maintenance. Similarly, high energy costs could be attributed to increased
electricity or fuel prices required for processing, packaging, and distribution.
These factors collectively contribute to the lower net profit reported by Farm Fresh
Milk Sdn. Bhd. for FY2023.
Chapter 2: Data Analysis
Question 2: Conducting a test to determine whether quarterly sales of Farm Fresh
Milk Sdn. Bhd. differ by types of milk product at a 1% significance level.
To conduct the test, we need to define the competing hypotheses:

 Null Hypothesis (H0): There is no difference in quarterly sales of Farm Fresh

Milk Sdn. Bhd. by types of milk product.
 Alternative Hypothesis (H1): Quarterly sales of Farm Fresh Milk Sdn. Bhd.
differ by types of milk product.
Using the provided dataset, we can analyze the quarterly sales of Farm Fresh Milk
Sdn. Bhd. across different types of milk products. By performing a statistical test,
such as the analysis of variance (ANOVA), we can determine if there is a significant
difference in sales between the milk product types.
Chapter 3: Data Analysis
Question 3: Conducting a regression model to determine how each operating
expenditure incurred by Farm Fresh Milk Sdn. Bhd. affects its total production cost.
To conduct the test, we will form a regression model to analyze the relationship
between operating expenditures and total production cost. The regression model will
provide estimated coefficients, an estimated equation, and information on individual
significance.
i. Estimated equation: The estimated equation will capture the relationship between
operating expenditures and total production cost. It will be of the form: Total
Production Cost = β0 + β1 * Raw Material Cost + β2 * Labor Cost + β3 * Farming
Cost + β4 * Energy Cost + ε
ii. Interpretation of coefficient estimates:

 β0 (Intercept): This represents the estimated total production cost when all
operating expenditures are zero. It captures fixed costs and other factors not
included in the model.
 β1, β2, β3, β4: These coefficients estimate the impact of raw material cost,
labor cost, farming cost, and energy cost, respectively, on the total production
cost, holding other variables constant.

 ε (Error term): This term accounts for unexplained variability in the total
production cost not captured by the operating expenditures.

iii. Testing for individual significance: We will test the individual significance of each
independent variable (raw material cost, labor cost, farming cost, and energy cost)
using the provided dataset. By examining the p-values associated with each
coefficient estimate, we can determine if the variables have a statistically significant
impact on the total production cost at a 5% significance level.
Chapter 4: Conclusion
Based on the findings from the regression analysis, we will conclude which operating
expenditures of Farm Fresh Milk Sdn. Bhd. are statistically significant in affecting its
total production cost. We will propose two reasonable solutions to address the
identified issue/problem, taking into account the impact of the significant operating
expenditures and the potential strategies for cost reduction or optimization.