Question
Assume Lupes Custom Bandera Shop has the following information on the number of sales orders received and order-processing costs. A plot of the data is
Assume Lupes Custom Bandera Shop has the following information on the number of sales orders received and order-processing costs. A plot of the data is also presented below: Month Sales Orders Order-Processing Costs Jan 450 $6,000 Feb 225 4,200 Mar 690 9,750 Apr 420 5,850 May 345 4,800 Jun 150 3,000 Jul 300 4,500 Order Processing Costs and sales orders graph A) Using the high-low method of cost estimation, develop a cost-estimating equation for monthly production costs. B) Your supervisor is planning for next quarter and wants to know what total costs will be if sales orders can be increased to 1,000. How much would total order-processing costs be at that level of activity?
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