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Overview: You are working as a business consultant, helping companies to better manage their costs. One of your clients is Supremo Burritos, a chain of
Overview: You are working as a business consultant, helping companies to better manage their costs. One of your clients is Supremo Burritos, a chain of quick service burrito stores across the state of Pennsylvania. Supremo Burritos has approached you because they would like to better understand their operating costs aside from their costs for food, labor and rent. You have been given a dataset which includes several pieces of data the client has collected over the past two years. Your goal is to use data analysis to help Supremo Burrito's management generate a cost equation that will be useful for predicting future "other operating costs" for your client using the best available cost driver or drivers. Getting started: The dataset includes months of data for Supremo Burritos' "Other Operating Costs" as well as possible drivers. The dataset also includes additional data on the underlying items that make up "the total "Other Operating Costs". To complete the project you will need to follow the all the steps in parts and and write a memo as described in part Before starting parts through I would recommend setting up a separate tab in your excel spreadsheet for each possible cost driver and including all of the required items in parts that relate to that specific cost driver. For Parts Treat "Other Operating Costs" as a single cost pool Part : Estimate the basic cost equation for "Other Operating Costs" using the Highlow method separately for each possible cost driver Use the Highlow method to determine the cost equation that expresses how monthly "Other Operating Costs" behave in relation to that particular cost driver. Clearly show the two months you used to generate the Highlow equation. Be sure to clearly state and label the resulting high low equation for each possible cost driver.
Overview:
You are working as a business consultant, helping companies to better manage their costs. One
of your clients is Supremo Burritos, a chain of quick service burrito stores across the state of
Pennsylvania. Supremo Burritos has approached you because they would like to better
understand their operating costs aside from their costs for food, labor and rent. You have been
given a dataset which includes several pieces of data the client has collected over the past two
years. Your goal is to use data analysis to help Supremo Burrito's management generate a cost
equation that will be useful for predicting future "other operating costs" for your client using the
best available cost driver or drivers.
Getting started:
The dataset includes months of data for Supremo Burritos' "Other Operating Costs" as well as
possible drivers. The dataset also includes additional data on the underlying items that make up
"the total "Other Operating Costs".
To complete the project you will need to follow the all the steps in parts and and write a
memo as described in part
Before starting parts through I would recommend setting up a separate tab in your excel
spreadsheet for each possible cost driver and including all of the required items in parts that
relate to that specific cost driver.
For Parts Treat "Other Operating Costs" as a single cost pool
Part : Estimate the basic cost equation for "Other Operating Costs" using the Highlow
method separately for each possible cost driver
Use the Highlow method to determine the cost equation that expresses how monthly "Other
Operating Costs" behave in relation to that particular cost driver. Clearly show the two months
you used to generate the Highlow equation. Be sure to clearly state and label the resulting high
low equation for each possible cost driver.
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