E2-19. Scatter Diagrams and High-Low Cost Estimation Assume the local Pearlo Vision has the following information...

 

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E2-19. Scatter Diagrams and High-Low Cost Estimation Assume the local Pearlo Vision has the following information on the number of sales orders re- ceived and order-processing costs. 1 23 2 4 567 a. b. Month C. Sales Orders 3,000 1,500 4,400 2,800 2,300 1,200 2,000 Required Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-processing costs. Plot the data on a scatter diagram. Using the information from representative high- and low- volume months, develop a cost-estimating equation for monthly production costs. What factors might have caused the difference in the equations developed for requirements (a) and (b)? Order-Processing Costs $32,000 22,400 55,400 31,200 25,600 17,000 24,000 E2-19. Scatter Diagrams and High-Low Cost Estimation Assume the local Pearlo Vision has the following information on the number of sales orders re- ceived and order-processing costs. 1 23 2 4 567 a. b. Month C. Sales Orders 3,000 1,500 4,400 2,800 2,300 1,200 2,000 Required Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-processing costs. Plot the data on a scatter diagram. Using the information from representative high- and low- volume months, develop a cost-estimating equation for monthly production costs. What factors might have caused the difference in the equations developed for requirements (a) and (b)? Order-Processing Costs $32,000 22,400 55,400 31,200 25,600 17,000 24,000

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