Question
Cubicle Solutions sells productivity software such as word processors, spreadsheets, and personal information managers. Cubicle prides itself on customer support and maintains a large call
Cubicle Solutions sells productivity software such as word processors, spreadsheets, and personal information managers. Cubicle prides itself on customer support and maintains a large call center where customers can call in with technical questions about the installation and use of Cubicle products.
Monthly data on the number of support calls and call center costs for the last year have been collected and are shown below (all activities and costs are in thousands):
Month | Support Calls | Call Center Cost |
1 | 47 | $583 |
2 | 59 | 695 |
3 | 55 | 690 |
4 | 49 | 585 |
5 | 65 | 745 |
6 | 57 | 710 |
7 | 54 | 690 |
8 | 58 | 720 |
9 | 61 | 705 |
10 | 50 | 645 |
11 | 52 | 665 |
12 | 51 | 650 |
Required:
a. Estimate the monthly fixed costs and the unit variable cost per support call using the high-low estimation method. (Round variable cost per unit to 2 decimal places. Enter your answer in thousands of dollars.)
b. Draw a scattergraph relating call center costs to the number of support calls.
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