10-23: Estimating a cost function, high-low method. Laurie Daley is examining customer-service costs in the southern region of Capitol Products. Capitol Products has more than 200 separate electrical products that are sold with a 6-month guarantee of full repair or replacement with a new product. When a product is returned by a costumer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 10-week period are: Week 2 3 4 5 6 7 8 9 10 Customer Service Department Costs $13,845 20,624 12,941 18,452 14,843 21,890 16,831 21,429 18,267 16,832 Number of Service Reports 201 276 122 386 274 436 321 328 243 161 1. Plot the relationship between customer-service costs and number of service reports. Is the relationship economically plausible? 2. Use the high-low method to compute the cost function, relating customer-service costs to the number of service reports. 3. What variables, in addition to number of service reports, might be cost drivers of monthly customer-service costs of Capitol Products