Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong customer service focus and knows that branch visits can be important in fostering a reputation for good customer service. However, as Internet banking increases in popularity, the financial staff at Fordson question whether the costs of the branch are worth it.

As part of looking at the question, a financial analyst has collected monthly data on the number of customer visits to the branch and the operating cost of the branch over the last fiscal year. The data follow:

Required

a. Estimate the monthly fixed costs and the unit variable cost per customer visit using the highlow estimation method.

b. Draw a scattergraph relating branch costs to the number of customer visits.

c. Considering your scattergraph, how much confidence do you have in your estimate from requirement (a)? 

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A 1 Month 2 3 4 5 6 7 8 9 10 11 12 13 14 1234 M45678 69 10 11 12 B с Customer Visits Branch Cost 962 $ 1,378 1,170 1,014 1,586 1,222 1,144 1,248 1,430 1,040 1,092 1,066 69,600 86,250 73,750 66,875 96,120 76,250 73,750 77,500 87,500 68,125 70,625 68,750