Refer to Asokan’s Golden Brown Pancake Restaurant in E3- 33A.

Data in E3- 33A.

Asokan’s Golden Brown Pancake Restaurant features sourdough pancakes made from a strain of sourdough dating back to the Yukon gold rush. To plan for the future, Asokan needs to figure out his cost behaviour patterns. He has the following information about his operating costs and the number of pancakes served:

Requirements 

1. Use the high-low method to determine Asokan’s operating cost equation. 

2. Use your answer from Requirement 1 to predict total monthly operating costs if Asokan serves 5,000 pancakes in one month. 

3. Can you predict total monthly operating costs if Asokan serves 10,000 pancakes a month? Explain. 

Transcribed Image Text:

Month July August September October November December ........... Number of Pancakes 3,600 3,900 3,200 3,300 3,850 3,620 Total Operating Costs $2,340 $2,390 $2,320 $2,270 $2,560 $2,530