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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?

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