ABC company is continuing to re-evaluate all aspects of the business and would like you to look into staffing costs.Below is a summary of the monthly costs.

Staff number Number of meals Staff cost ($)

January 20 700 27800

February 22 250 14000

March 10 200 12000

April 20 500 20000

May 24 650 23800

June 28 450 18400

July 16 50 20400

August 14 150 8200

September 24 350 18800

October 24 600 22200

November 16 300 16600

December 32 750 32200

ABC Co. relevant range has been estimated to be between 300 and 600 meals.

Required:

1. Draw a scatter diagram of ABC co. meals and staff costs and mark the relevant range .
2. Use the high-low method to estimate the behaviour of Pork Bellies staff costs based on meal numbers within the relevant range.Use an equation to express the results of this estimation method.
3. Using excel or a similar program construct a regression analysis to estimate:
4. The equation to predict staff costs based on the number of meals within the relevant range
5. Based on the equation in 3 a) what would the staff cost be with 400 meals per month .
6. Using both activities - number of meals and staff numbers, determine what the staff cost, within the relevant range, would be.
7. Does the inclusion of the additional cost driver (staff number) improve the model? Explain your answer.