Estimating a cost function, high-low method. Laurie Daley is examining customer-service costs in the southern...
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Estimating a cost function, high-low method. Laurie Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than 200 separate electrical prod- ucts that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows: Week Customer-Service Department Costs S13,700 20,900 13,000 18,800 14,000 21,500 16,900 21,000 Number of Service Reports 190 275 115 395 265 455 340 305 Use the high-low method to compute the cost function, relating customer-service costs to the number of service reports
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