The Bright School Logo Products Company needs to predict the labor cost in producing specialty coffee mugs. The following production information is available:
Wage rates have steadily increased since 2012; however, management expects no further increases in 2018.
a. Select the appropriate independent variable for estimating labor cost. Explain the reason for your selection.
b. Develop an equation to predict for 2018 the labor cost of producing specialty mugs. Use the high-low method.

Question

The Bright School Logo Products Company needs to predict the labor cost in producing specialty coffee mugs. The following production information is available:
  Wage rates have steadily increased since 2012; however, management expects no further increases in 2018.
a. Select the appropriate independent variable for estimating labor cost. Explain the reason for your selection.
b. Develop an equation to predict for 2018 the labor cost of producing specialty mugs. Use the high-low method.

Quizplus · Accepted Answer

The Answer of The Bright School Logo Products Company needs to predict the labor cost in producing specialty coffee mugs. The following production information is available:
  Wage rates have steadily increased since 2012; however, management expects no further increases in 2018.
a. Select the appropriate independent variable for estimating labor cost. Explain the reason for your selection.
b. Develop an equation to predict for 2018 the labor cost of producing specialty mugs. Use the high-low method.

The Bright School Logo Products Company Needs to Predict the Labor