Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the...
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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 $ 49,620 2 1,500 30,225 3 4,400 72,420 4 2,800 49,140 5 2,300 41,865 6 1,200 25,860 7 2,000 37,500 Required (a.) Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order- processing costs. $ 8,400 + $ 14.55 (b.) Plot the data on a scatter diagram. Using the information from representative high-and low-volume months, develop a cost estimating equation for monthly production costs. If needed, an Excel worksheet is provided in the following link in order to create the scatter diagram: Scatter_Diagram $ 18,400 X + $ 24.25 XX
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