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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 $ 165,400
2 1,500 100,750
3 4,400 241,400
4 2,800 163,800
5 2,300 139,550
6 1,200 86,200
7 2,000 125,000

NOTE: Round variable cost per unit answers to two decimal places, if appropriate.

(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. Hint: In Excel, highlight the data to be included in the chart. Open the insert tab and select the Scatter chart in the Charts group. Using the information from representative high- and low-volume months, develop a cost-estimating equation for monthly order-processing costs.

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