ANALYTICAL THINKING

Maple Sweepers of Toronto manufacturers replacement rotary sweeper brooms for the large sweeper trucks that clear leaves and snow from city streets. The business is seasonal, with the largest demand during and just preceding the fall and winter months. Because there are so many kinds of sweeper brooms used buy its customers, Maple leaf Sweeper makes all its brooms to order.

The company has been analyzing its overhead accounts to determine fixed and variable components for planning purposes. Following are data for the companys janitorial labor costs over the last nine months. (Cost data are in Canada dollars.

	Number of units produced	Number of Janitorial workdays	Number of Labor cost
January	115	21	$3,840
February	109	19	$3,648
March	102	23	$4,128
April	76	20	$3,456
May	69	23	$4,320
June	108	22	$4,032
July	77	16	$2,784
August	71	14	$2,784
September	127	21	$3,840

The number of workdays varies from month to month due to the numbers of weekdays, holidays, days of vacation, and sick leave taken in the month. The number of units produced in a month varies depending on demand and the number of workdays in the month.

There are two janitors who each work an eight hour shift each workday. They each can take up to 10 days of paid sick leave each year. Their wages on days they call in sick and their wages during paid vacation are charged to miscellaneous rather than to the janitorial labor account.

REQUIRED:

1.Plot the janitorial labor cost and units produced on scattergraph. (Place cost on the vertical axis and units produced on the horizontal axis)

2.Plot the janitorial labor cost and number of workdays on scattergraph. (Place cost on the vertical axis and the number of workdays on the horizontal axis)

3.Which measure of activity-number of units produced or janitorial workdays---should be used as the activity base for explaining janitorial labor cost?