20. Andrew, marketing clerk for Shine Agency, recorded the following information for last year: Month Number of Customers Customer Service Costs January 356 $ 527,233 February 417 544,335 March 338 482,655 April 526 668,050 May 400 530,500 June 457 656,910 July 366 543,770 August 495 680,400 September 345 487,230 October 531 712,325 November 443 629,030 December 415 542,000 He would like to be able to estimate customer service costs using the number of customers as the basis for estimation. However, because he has never taken a course in managerial accounting, he does not know how to set up a cost equation. He has therefore approached you for help. Required: 1. Set up a cost equation for monthly customer service costs using the high–low method.
20. Andrew, marketing clerk for Shine Agency, recorded the following information for last year: Month Number of Customers Customer Service Costs January 356 $ 527,233 February 417 544,335 March 338 482,655 April 526 668,050 May 400 530,500 June 457 656,910 July 366 543,770 August 495 680,400 September 345 487,230 October 531 712,325 November 443 629,030 December 415 542,000 He would like to be able to estimate customer service costs using the number of customers as the basis for estimation. However, because he has never taken a course in managerial accounting, he does not know how to set up a cost equation. He has therefore approached you for help. Required: 1. Set up a cost equation for monthly customer service costs using the high–low method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
20.
Andrew, marketing clerk for Shine Agency, recorded the following information for last year:
| Month | Number of Customers | Customer Service Costs | ||
| January | 356 | $ | 527,233 | |
| February | 417 | 544,335 | ||
| March | 338 | 482,655 | ||
| April | 526 | 668,050 | ||
| May | 400 | 530,500 | ||
| June | 457 | 656,910 | ||
| July | 366 | 543,770 | ||
| August | 495 | 680,400 | ||
| September | 345 | 487,230 | ||
| October | 531 | 712,325 | ||
| November | 443 | 629,030 | ||
| December | 415 | 542,000 | ||
He would like to be able to estimate customer service costs using the number of customers as the basis for estimation. However, because he has never taken a course in
Required:
1. Set up a cost equation for monthly customer service costs using the high–low method.
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