Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following information on the number of sales orders received and order-processing ce Month Sales Orders Order Processing Costs 3,000 $49,620 30,225 72,420 49,140 41,865 1 2 3 4 S 6 7 1,500 4,400 2.800 2.300 1,200 2.000 25,860 37,500 NOTE: Round variable cost per unit answers to two decimal places, if appropriate. (a.) Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-process $ 15:400 +5 24.26 * 8400 + M.SS* Correct

Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following information on the number of sales orders received and order-processing ce Month Sales Orders Order Processing Costs 3,000 $49,620 30,225 72,420 49,140 41,865 1 2 3 4 S 6 7 1,500 4,400 2.800 2.300 1,200 2.000 25,860 37,500 NOTE: Round variable cost per unit answers to two decimal places, if appropriate. (a.) Use information from the high- and low-volume months to develop a cost-estimating equation for monthly order-process $ 15:400 +5 24.26 * 8400 + M.SS* Correct

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Description: Scatter Diagrams and High-Low Cost EstimationAssume the local Pearle Vision has the following information on the number of sales orders received and order-processing costs.Month Sales Orders Order Processing Costs13,000$49,62021,50030,2254,40072,420

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 17E

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Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?
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