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Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Coles 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, Coles 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 and Cleaned Costs Month 350 $9,600 300 8,800 400 10,400 April May June July August September October 250 8,000 375 10,000 200 7,200 100 6,200 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = $ 4,800 + $ 14 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 = $ 4,800 X + $ 14 x X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 8 percent increase in wages. Monthly labor costs = $ 4,800 X + $ 15.12 X X

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