Month Purclusing Cost Number of Purchase Orders January February March April Мay June July August September $18,860 18,065 19,250 18,050 19,345 19,500 19,670 20,940 19,430 20,020 18,800 19,340 370 330 370 410 400 450 460 560 440 October 500 November December 470 480
Dohini Manufacturing company had following 12 months of data on purchasing cost and number of purchase orders.
Required:
1. Determine the high point and low point.
2. Calculate the variable rate for purchasing cost based on the number of purchase orders. (Round to nearest cent)
3. Calculate the fixed monthly cost of purchasing.(Round to nearest dollar).
4. Write the cost formula for the purchasing activity showing the fixed cost and the variable rate.
5. If Dohini manufacturing company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for the that month?(Round to nearest dollar)
6. What if Dohini manufacturing wants to estimate purchasing cost for the coming year and expects 5340 purchase orders? What will estimated total purchasing cost be? What is the total fixed purchasing cost? Why doesn't equal the fixed cost calculated in Requirement 3?(Round to nearest dollar)
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