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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

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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: Miles Mowed Labor Month and Cleaned costs April 350 $16,000 May 300 15,000 June 400 18,000 July 11,000 August 17,000 September 200 10,000 October 100 9,600 250 375 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = $ 6,800 + $ 28X 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 = $ 6,800 X + $ 28 X X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages. Monthly labor costs = $ 6,800 X + $ 29.96 x x

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