From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-way along county roads. The County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following information is available regarding current-year operations: Month and Cleaned April May June July Miles Mowed Labor Costs 350 $4,000 300 3,750 400 4,500 250 2,750 375 4,250 200 2,500 100 2,400 August September October Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = $ 1700 + $ 7 X Plot the data on a scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost- estimating equation for monthly labor costs. Monthly labor costs = $ +$ X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages. Monthly labor costs = $ X $

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Scatter Diagrams and High-Low Cost Estimation
From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-way along county roads. The
County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following
information is available regarding current-year operations:
Miles Mowed Labor
Costs
350 $4,000
300
3,750
400
4,500
250
2,750
375 4,250
200 2,500
100 2,400
Month and Cleaned
April
May
June
July
August
September
October
Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs.
Monthly labor costs = $ 1700 + $
7 X
Plot the data on scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost-
estimating equation for monthly labor costs.
Monthly labor costs = $
$
X
Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages.
Monthly labor costs = $
X
$
Transcribed Image Text:Scatter Diagrams and High-Low Cost Estimation From April 1 through October 31, Will County Highway Department hires temporary employees to mow and clean the right-of-way along county roads. The County Road Commissioner has asked you to help her in determining the variable labor cost of mowing and cleaning a mile of road. The following information is available regarding current-year operations: Miles Mowed Labor Costs 350 $4,000 300 3,750 400 4,500 250 2,750 375 4,250 200 2,500 100 2,400 Month and Cleaned April May June July August September October Use the information from the high- and low-volume months to develop a cost-estimating equation for monthly labor costs. Monthly labor costs = $ 1700 + $ 7 X Plot the data on scatter diagram. Using the information from representative high- and low volume months, use the high-low method to develop a cost- estimating equation for monthly labor costs. Monthly labor costs = $ $ X Adjust the equation developed in requirement (b) to incorporate the effect of an anticipated 7 percent increase in wages. Monthly labor costs = $ X $
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