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The manager of the main laboratory facility at CapitalHealth Center is interested in being able to predict the overhead costs each month for the lab.
The manager of the main laboratory facility at CapitalHealth Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed. The lab manager collected the following data for the first seven months of the year. (Click the icon to view the data.) Use the high-low method to determine the laboratory's cost equation for total laboratory overhead. Use your results to predict total laboratory overhead if 3,000 lab tests are performed next month. Number of Lab Tests Performed Total Laboratory Overhead Costs Month January February March ....... 2,800 2,600 3,100 April 3,550 $21,500 $22,700 $27,900 $31,400 $28,500 $19,500 $14,500 May ....... 3,700 1,200 June July 1,400
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