Silk Flowers & More is an on-line company that specializes in selling silk flower arrangements, offering their customers free shipping on all orders. Management currently is interested in understanding how shipping costs vary with the number of flower arrangements sold. To this end, they have provided you with the following data for the most recent five months of operations:

Required:
a. Use the high-low method to estimate Silk Flowers & More’s monthly shipping cost equation.
b. Assume Silk Flowers & More expects to sell 5,500 flower arrangements in June. Use the cost equation you developed in part (a) to estimate Silk Flowers & More’s June shipping costs.
c. Discuss why management of Silk Flowers & More would want an estimate of the cost equation for monthly shippingcosts.

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MonthFlower Arrangements Sold Sipping Costs January February March April May 5,000 7,500 6,000 6,500 7,000 $27,500 $33,750 $30,250 $81,000 $32,375