PA5-2 (Algo) Estimating Cost Behavior Using Scattergraph, High-Low, and Least-Squares Regression Methods [LO 5-2, 5-3, 5-4]

Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslies prints everything from bowling team jerseys to fraternity/sorority apparel to special event shirts, summer league baseball and softball team jerseys are the companys biggest source of revenue. A portion of Leslies operating information for the companys last year follows:

	Number of	Operating
Month	Jerseys Printed	Cost
January	220	$5,875
February	215	5,780
March	245	5,950
April	555	8,700
May	700	9,700
June	615	9,295
July	460	6,220
August	350	6,150
September	320	6,040
October	250	5,960
November	205	4,925
December	200	4,810

Required: 3. Using the high-low method, calculate the stores total fixed operating costs and variable operating cost per jersey. 4. Using the high-low method results, calculate the stores expected operating cost if it printed 475 jerseys. 5. Perform a least-squares regression analysis on Leslies data. 6. Using the regression output, create a linear equation (y = a + bx) for estimating Leslies operating costs. 7. Using the least-squares regression results, calculate the stores expected operating cost if it prints 630 jerseys.