Question
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
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:
| Month | Miles Mowed and Cleaned | Labor Costs |
|---|---|---|
| April | 350 | $16,000 |
| May | 300 | 15,000 |
| June | 400 | 18,000 |
| July | 250 | 11,000 |
| August | 375 | 17,000 |
| September | 200 | 10,000 |
| October | 100 | 9,600 |
Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs.
| Monthly labor costs | = | Answer
| + | Answer
| X |
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 | = | Answer
| + | Answer
| X |
Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages.
| Monthly labor costs | = | Answer
| + | Answer
| X |
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Management Accounting In Health Care Organizations
Authors: David W. Young
3rd Edition
1118653629, 978-1118653623
