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.

$Answer

+ $Answer

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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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+ $Answer

X