Pierce Can Company manufactures cans for the canned food industry. The operations manager of a can manufacturing operation wants to conduct a cost study investigating the relationship of tin content in the material (can stock) to the energy cost for enameling the cans. The enameling was necessary to prepare the cans for labeling. A higher percentage of tin content in the can stock increases the cost of material. The operations manager believed there was a relationship between the tin content and energy costs for enameling. During the analysis period the amount of tin content in the steel can stock was increased for every month, from April to September. The following operating reports were available from the controller:

Differences in materials unit costs were entirely related to the amount of tin content. Interpret this information and report to the operations manager your recommendations with respect to tincontent.

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April May July Ast September June Energy Materials Total cost 13,000 28,800 24,200 14,000 16,200 15,000 29,000 25,000 58,800 $ 52,800 32,900 41,400 $ 44,000 Units produced 100,000 240,000 220,000 40,000 180,000 200,000 Cost per unit 0.250 S 0.245 0.240 0.235 0.230 0.220 12,000 30,000 28,600 18,900 25,200