Question
. Estimating a cost function, high-low method. Laurie Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than
. Estimating a cost function, high-low method. Laurie Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than 200 separate electrical products that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows:
Week Customer-Service Department Costs Number of Service Reports
1 13700 190 | |
2 20,900 | 275 |
3 13,000 | 1 15 |
4 18,800 | 395 |
5 14,000 | 265 |
6 21,500 | 455 |
7 16,900 | 340 |
8 21000 | 305 |
Required
Use the high-low method to compute the cost function, relating customer-service costs to the number of service reports
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