Question

could someone please help me with letter c?

The number of X-rays taken and X-ray costs over the first nine months of 2018 are given below. Ints January February March April May June July August September X-Rays Taken 6,250 7,000 5,000 4,250 4,500 3,000 3,750 5,500 5,750 X-Ray Costs $28,000 $29,000 $23,000 $20,000 $22,000 $17.000 $18,000 $24,000 $26,000 Skipped eBook Print References Required: Using the high-low method, estimate the cost equation for X-ray costs. (b) Using the cost equation you derived in (a), estimate the X-ray costs if 4,600 X-rays are taken. Prepare a scatterplot using the data given. Use Excel to fit a straight line through the data points. Write down the cost equation. Briefly explain why the cost equation you estimated using Excel is different from the one you estimated using the high-low method in (a).

Answer 1

(a)Using the high-low method the cost equation for X-rays is as follows:
	$
Highest x-rays taken	7000
Lowest x-rays taken	3000
X-rays cost for 7000 xrays	29000
X-rays cost for 3000 xrays	17000
Calculation of Variable cost:
Variable cost per x-ray is	3	(29000-17000)/(7000-3000)
Calculation of fixed cost:
Fixed cost	8000	29000-(3*7000)
Variable cost is	21000	B8*B3
(b) calculation of x-ray costs if 4600 xrays taken
Variable cost	13800	3*4600
Fixed cost	8000
Total cost	21800
Cost per xray	4.74
(c) calcualtion and analysing the cost equation:
Month	X-Rays taken	X-Ray Costs	Cost per unit
January	6250	28000	4.48
February	7000	29000	4.14
March	5000	23000	4.6
April	4250	20000	4.71
May	4500	22000	4.89
June	3000	17000	5.67
July	3750	18000	4.80
August	5500	24000	4.36
September	5750	26000	4.52
			42.17
Average cost per x-ray by using straight line			4.69	D38/9
In high-low method the highest and lowest xrays taken as base for calculation
of cost per x-ray by splitting the variable cost and fixed cost.
In straight line method the xray per unit is calculated as per the given data
and average the xray for the 9 months.