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 cost

1 3,300 90,970

2 1,650 55,412

3 4,840 132,770

4 3,080 90,090

5 2,530 76,752

6 1,320 47,410

7 2,200 68,750

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

$Answer

+ $Answer

X

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

$Answer

+ $Answer