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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.

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 3,000 $ 132,320
2 1,500 80,600
3 4,400 193,120
4 2,800 131,040
5 2,300 111,640
6 1,200 68,960
7 2,000 100,000

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 production costs. If needed, an Excel worksheet is provided in the following link in order to create the scatter diagram: Scatter_Diagram

Month Sales Orders Order-Processing Costs
1 3,000 $ 132,320
2 1,500 80,600
3 4,400 193,120
4 2,800 131,040
5 2,300 111,640
6 1,200 68,960
7 2,000 100,000

$

Answer
+ $Answer
X

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