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 3,300 $90,970 2 1,650 55,412 3 4,840 132,770 4 3,080 90,090 5 2,530 76,752 6 1,320 47,410 7 2,200 68,750 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. $Answer 1 + $Answer 2 X (b.) Plot the data on a scatter diagram. Hint: In Excel, highlight the data to be included in the chart. Open the insert tab and select the Scatter chart in the Charts group. Using the information from representative high- and low-volume months, develop a cost-estimating equation for monthly order-processing costs. $Answer 3 + $Answer 4
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 3,300 $90,970 2 1,650 55,412 3 4,840 132,770 4 3,080 90,090 5 2,530 76,752 6 1,320 47,410 7 2,200 68,750 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. $Answer 1 + $Answer 2 X (b.) Plot the data on a scatter diagram. Hint: In Excel, highlight the data to be included in the chart. Open the insert tab and select the Scatter chart in the Charts group. Using the information from representative high- and low-volume months, develop a cost-estimating equation for monthly order-processing costs. $Answer 3 + $Answer 4
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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
3,300
$90,970
2
1,650
55,412
3
4,840
132,770
4
3,080
90,090
5
2,530
76,752
6
1,320
47,410
7
2,200
68,750
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.
$Answer 1
+ $Answer 2
X
(b.) Plot the data on a scatter diagram. Hint: In Excel, highlight the data to be included in the chart.
Open the insert tab and select the Scatter chart in the Charts group. Using the information from
representative high- and low-volume months, develop a cost-estimating equation for monthly
order-processing costs.
$Answer 3
+ $Answer 4
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