Scatter Diagrams and High$-$Low Cost Estimation

From April $1$ through October $31,$ Will County Highway Department hires temporary employees to mow and clean the right$-$of$-$way along county roads. The County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following information is available regarding current$-$year operations:

Month Miles Mowed

and Cleaned Labor

Costs

April $350$ $$12,000$

May $30011,250$

June $40013,500$

July $2508,250$

August $37512,750$

September $2007,500$

October $1007,200$

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

Monthly labor costs $=$ Answer

$5,100$

$+$ Answer

$21$

X

Plot the data on a scatter diagram. Using the information from representative high$-$ and low volume months, use the high$-$low method to develop a cost$-$estimating equation for monthly labor costs.

Monthly labor costs $=$ Answer

$5,100$

$+$ Answer

$21$

X

Adjust the equation developed in requirement $($b$)$ to incorporate the effect of an anticipated $7$ percent increase in wages.

Monthly labor costs $=$ Answer

$5,100$

$+$ Answer

$22\mathrm{.}47$

X