Question
Genesee Fishing Tours (GFT) offers small group fishing expeditions off the local coast. The managers of the company are considering expanding the business to another
Genesee Fishing Tours (GFT) offers small group fishing expeditions off the local coast. The managers of the company are considering expanding the business to another city and want to put together a financial plan. As a part of that effort, the financial staff are analyzing the operating costs of GFT. They believe that a good predictor of operating cost is the number of clients that use the service. As a part of their analysis, they have collected 30 months of data on operating costs and number of clients, which follow:
Month | Clients | Operating Cost |
---|---|---|
1 | 458 | $ 36,980 |
2 | 741 | 42,790 |
3 | 608 | 41,810 |
4 | 526 | 38,500 |
5 | 648 | 41,860 |
6 | 436 | 35,850 |
7 | 391 | 34,400 |
8 | 713 | 40,310 |
9 | 831 | 42,010 |
10 | 565 | 39,240 |
11 | 714 | 44,220 |
12 | 652 | 39,980 |
13 | 665 | 41,760 |
14 | 548 | 39,680 |
15 | 453 | 38,890 |
16 | 371 | 36,030 |
17 | 565 | 50,640 |
18 | 613 | 55,770 |
19 | 484 | 44,160 |
20 | 518 | 48,570 |
21 | 476 | 45,590 |
22 | 481 | 44,680 |
23 | 584 | 53,490 |
24 | 602 | 53,820 |
25 | 779 | 65,490 |
26 | 649 | 58,830 |
27 | 612 | 54,460 |
28 | 527 | 48,060 |
29 | 509 | 46,290 |
30 | 547 | 51,590 |
Required:
Estimate the operating costs assuming 700 clients for the month using the high-low method.
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