Scatter Diagrams and High-Low Cost Estimation

Module From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the rightof-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: Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the highlow method to develop a cost-estimating equation for monthly labor costs. = Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages