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Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-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: Month April May June My August September October Miles Mowed Labor and Cleaned Costs 350 $6,400 300 6,000 400 7200 250 4,400 375 6.800 200 4000 100 3.840 Use the information from the high-and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs-s 2.720 11.2 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-estimating equation for monthly labor costs. Monthly labor costs - $ 2,720 +1 112 x X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages, Monthly labor costs-3 0 x x

Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-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: Month April May June My August September October Miles Mowed Labor and Cleaned Costs 350 $6,400 300 6,000 400 7200 250 4,400 375 6.800 200 4000 100 3.840 Use the information from the high-and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs-s 2.720 11.2 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-estimating equation for monthly labor costs. Monthly labor costs - $ 2,720 +1 112 x X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages, Monthly labor costs-3 0 x x

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-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: Month Miles Mowed Labor and Cleaned Costs 350 $6,400 300 6,000 400 7,200 250 4,400 April May June jy August September October 375 6,800 200 4000 100 3840 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs $ 2.720 11.2 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-estimating equation for monthly labor costs. Monthly labor costs - S 2.720 x 1 112 x X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages, Monthly labor costs - ON S oxx
Transcribed Image Text:Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-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: Month Miles Mowed Labor and Cleaned Costs 350 $6,400 300 6,000 400 7,200 250 4,400 April May June jy August September October 375 6,800 200 4000 100 3840 Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs $ 2.720 11.2 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-estimating equation for monthly labor costs. Monthly labor costs - S 2.720 x 1 112 x X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages, Monthly labor costs - ON S oxx
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