Suenos Manufacturing Company had the following 12 months of data on purchasing cost and number of purchase orders.

Required:
1. Determine the high point and the low point.
2. Calculate the variable rate for purchasing cost based on the number of purchase orders.
3. Calculate the fixed monthly cost of purchasing.
4. Write the cost formula for the purchasing activity showing the fixed cost and the variable rate.
5. IfSuenos Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month?
6. What if Suenos Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? What is the total fixed purchasing cost? Why doesn’t it equal the fixed cost calculated in Requirement 3 above?LO1

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Month Purchasing Cost Number of Purchase Orders January February $20,068 330 20,890 370 March 20,750 410 April 22,050 400 May 21,900 450 June 21,300 460 July 23,426 560 August 21,670 440 September 22,250 500 October 21,200 470 November 21,800 480 December 20,800 370