Refer to the data in the preceding exercise.
In the preceding exercise, Jonathan Macintosh is a highly successful upstate New York orchardman who has formed his own company to produce and package applesauce. Apples can be stored for several months in cold storage, so applesauce production is relatively uniform throughout the year. The recently hired controller for the firm is about to apply the high-low method in estimating the company’s energy cost behavior. The following costs were incurred during the past 12 months:

1. Draw a scatter diagram and graph the company’s energy cost behavior using the visual-fit method.
2. Predict the energy cost for a month in which 78,000 pints of applesauce are produced.
3. What peculiarity is apparent from the scatter diagram? What should the cost analystdo?

  • CreatedApril 22, 2014
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