Rick's Golden Pancake Restaurant features sourdough pancakes made from a strain of sourdough dating back to the Alaskan Gold Rush. To plan for the future, Rick needs to figure out his cost behavior patterns. He has the following information about his operating costs and the number of pancakes served:
Month Number of Pancakes Total Operating Costs
July........................................................ 3,900..............................................$2,340
August................................................... 4,200..............................................$2,530
September............................................. 3,600..............................................$2,440
October................................................. 3,700..............................................$2,290
November............................................. 4,000..............................................$2,560
December.............................................. 3,850..............................................$2,510
Requirements
1. Prepare a scatter plot of Rick's pancake volume and operating costs.
2. Does the data appear sound, or do there appear to be any outliers? Explain.
3. Based on the scatter plot, do operating costs appear to be variable, fixed, or mixed costs?
4. How strong of a relationship is there between pancake volume and operating costs?