Tad Jennings opened a tanning salon in a new shopping center. He had anticipated that the costs for the tanning service would be primarily fixed, but he found that tanning salon costs increased with the number of visits. Costs for this service over the past nine months are as follows:

Required:
1. Prepare a scattergraph based on the preceding data. Use cost for the vertical axis and number of tanning visits for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the cost of tanning services and the number of visits?
2. Compute the cost formula for tanning services using the high-low method.
3. Calculate the predicted cost of tanning services for October for 2,200 visits using the formula found in Requirement 2.

Transcribed Image Text:

Tanning Month Visits Total Cost January 700 $2,628 February 1,500 4,000 March 3,100 6,564 April 1,700 4,205 May 2,300 5,350 June 1,800 4,000 July 1,400 3,775 August 1,200 2,800 September 2,000 4,765