LO$2,3$ E$14-23.$ Selecting an Independent Variable: Scatter Diagrams

Brenthaven produces protective cases for mobile technology. The cases are sold internationally,

online, and through retail partners. Presented is information on production costs and inventory

changes for five recent months:

$$C$)$ Cambridge Business Publishers

Chapter $14$ Cost Behavior, Activity Analysis, and Cost Estimation

REQUIRED

a$.$ With the aid of scatter diagrams, determine whether units sold or units manufactured is a better

predictor of manufacturing costs.

b$.$ Prepare an explanation for your answer to requirement $(a).$

c$.$ Which independent variable, units sold or units manufactured, should be a better predictor of

selling costs? Why?