7. John Stern operates a retail store. The business is studying order processing costs behaviour and...

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7. John Stern operates a retail store. The business is studying order processing costs behaviour and has gathered the following data for a recent seven-month period. Month June (iii) (iv) (v) July August September October November December Sales Order 3,000 1,500 4,000 2,800 2,300 1,000 2,000 Order Processing Costs $40,000 $28,000 $65,000 $39,000 $32,000 $20,000 $30,000 (i) (ii) What is the equation of the total mixed cost function? Prepare the scatter gram, clearly showing any outliers. Using the "line of best fit", determine Stern's fixed cost per month and the variable cost per sales order In view of Stern's cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer. Determine the variable cost per sales order and the fixed cost using the high-low method. 7. John Stern operates a retail store. The business is studying order processing costs behaviour and has gathered the following data for a recent seven-month period. Month June (iii) (iv) (v) July August September October November December Sales Order 3,000 1,500 4,000 2,800 2,300 1,000 2,000 Order Processing Costs $40,000 $28,000 $65,000 $39,000 $32,000 $20,000 $30,000 (i) (ii) What is the equation of the total mixed cost function? Prepare the scatter gram, clearly showing any outliers. Using the "line of best fit", determine Stern's fixed cost per month and the variable cost per sales order In view of Stern's cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer. Determine the variable cost per sales order and the fixed cost using the high-low method.

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i Variable cost per sales order Highest Order Processing ... View the full answer