catter Diagrams and High-Low Cost Estimation From April 1 through October 31, Coles County Highway Department hires temporary employees to mow and clean the right-of-way along county roads. The County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following information is available regarding current-year operations: Month Miles Mowed and Cleaned Labor Costs April 350 $9,600 May 300 8,800 June 400 10,400 July 250 8,000 August 375 10,000 September 200 7,200 October 100 6,200 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = + X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = + X

Adjust the equation developed in requirement (b)

to incorporate the effect of an anticipated 8 percent increase in wages. Monthly labor costs = + X