Problem 3-14 High-Low Method; Scattergraph Analysis [LO2]

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Travis Metals heats copper ingots to a high temperature by placing them in a large oven. The heated ingots are then run through a shaping machine that forms them into wire. Due to the length of time it takes the oven to heat up, it is never turned off. When the ingots are placed in the oven the temperature is raised to a higher level. Once they are done being heated the oven temperature is turned back down until a new batch of ingots is ready to be heated. The following information shows the ingots processed and the power costs over the past 10 months.

Month	Ingots			Power Cost
January		138		$	6,620
February		118		$	5,620
March		108		$	5,520
April		128		$	6,120
May		158		$	7,120
June		148		$	6,720
July		98		$	5,120
August		88		$	4,320
September		78		$	4,520
October		68		$	3,520

Problem 3-14 Part 2 & 3

Required:

2. Using the highlow method, estimate a cost formula for power costs. Express the formula in the form Y = a + bX.

3. Predict total power costs in a month when 168 ingots are processed.

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