Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following information on the number of sales orders received and order-processing costs. Month Sales Orders Order-Processing Costs 1 3,000 $ 99,240 1,500 4,400 2 3 4 5 6 7 2,800 2,300 1,200 2.000 60,450 144,840 98,280 83,730 51,720 75,000 NOTE: Round variable cost per unit answers to two decimal places, if appropriate. (a.) Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-processing costs. S+S X
Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following information on the number of sales orders received and order-processing costs. Month Sales Orders Order-Processing Costs 1 3,000 $ 99,240 1,500 4,400 2 3 4 5 6 7 2,800 2,300 1,200 2.000 60,450 144,840 98,280 83,730 51,720 75,000 NOTE: Round variable cost per unit answers to two decimal places, if appropriate. (a.) Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-processing costs. S+S X
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 61P: Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a...
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