Question
Please solve this problem Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following information on the number of sales orders
Please solve this problem
Scatter Diagrams and High-Low Cost Estimation
Assume the local Pearle Vision has the following information on the number of sales orders received and order-processing costs.
Month Sales Orders Order-Processing Costs
1 . . . . . . . . . . . . . . . . . . . . . .$3,300 $90,970
2 . . . . . . . . . . . . . . . . . . . . . . .1,650 55,412
3 . . . . . . . . . . . . . . . . . . . . . . . . . . 4,840 132,770
4 . . . . . . . . . . . . . . . . . . . . . . . . . . 3,080 90,090
5 . . . . . . . . . . . . . . . . . . . . . . . . . . 2,530 76,752
6 . . . . . . . . . . . . . . . . . . . . . . . . . . 1,320 47,410
7 . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200 68,750
Required
a. Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-processing costs.
b. Plot the data on a scatter diagram. Using the information from representative high- and low-volume months, develop a cost-estimating equation for monthly production costs.
c. What factors might have caused the difference in the equations developed for requirements (a) and (b)?
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