Question
Assume Momas 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 Momas 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 |
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?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started