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

$13,000$ $ $99,240$

$21,50060,450$

$34,400144,840$

$42,80098,280$

$52,30083,730$

$61,20051,720$

$72,00075,000$

Required

$($a$.)$ Use information from the high$-$ and low$-$volume months to develop a cost$-$estimating equation for monthly order$-$processing costs.

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$($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 order$-$processing costs. If needed, an Excel worksheet is provided in the following link in order to create the scatter diagram: Scatter$\_$Diagram

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