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	$14,400
May	300	13,500
June	400	16,200
July	250	9,900
August	375	15,300
September	200	9,000
October	100	8,640

a. 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

b. 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

d. 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