Question

Question 1 - Selection of an activity base Fantastic Sweepers of New England manufactures replacement rotary sweeper brooms for large sweeper trucks that clear leaves and snow from city streets. The business is highly seasonal with the largest demand during and just preceding the fall and winter months. Because there are so many different kinds of sweeper brooms used by its customers, Fantastic Sweepers makes all of its brooms to order. points The company has been analyzing its overhead accounts to determine the fixed and variable components for planning purposes. Below are data for the company's janitorial labor costs over the last nine months. Skipped Number of Units Produced 'Number of Janitorial Workdays eBook Print References January February March April May June July August September Janitorial Labor Cost $3,840 $3,648 $4,128 $3,456 $4,320 $4,032 $2,784 $2,688 $3,840 The number of workdays varies from month to month due to the number of weekdays and holidays, as well as vacation days and sick leave taken by the workers in the month. The number of units produced in a month varies depending on demand and the number of workdays in the month

Answer 1

a)

To prepare a scatterplot using the janitorial labor cost and number of units produced, we have to go to excel , select insert, charts , select scatter as shown below

File Home Insert Page Layout Formulas Data Review View Developer Power Pivot Tell me what you want to do... illelu Allel tu I. V PivotTable Recommended Table PivotTables Tables Pictures Online Pictures Illustrations Store My Add-ins - Recommended Charts Add-ins Slicer PivotChart - + - Cha Scatter 3D Map Line Column Win/ Loss Sparklines Fill - X fac Chart 7 4 A DED B C D E F G H L M N Bubble Number of Number of units Janitorial Janitorial 1 Month produced workdays labor cost 2 January 115 21 $3,840 3 February 109 19 $3,648 4 March 102 23 $4,128 5 April 76 20 $3,456 6 May 69 23 $4,320 7 June 108 22 $4,032 8 July 77 16 $2,784 9 August 71 14 $2,688 10 September 127 21 $3,840 11 More Scatter Charts...

On the chart area, right click and choose select data , then select add,

File Home Insert Page Layout Formulas Data Review View Developer Power Pivot Design Format Add Chart Quick Element - Layout Chart Layouts Change Colors Chart Styles - X Fac Chart 7 4 A B C D E F G H I J K L Fill Outline Number of Number of units Janitorial Janitorial 1 Month produced workdays labor cost 2 January 115 21 $3,840 3 February 109 19 $3,648 4 March 102 23 $4,128 5 April 20 $3,456 6 May 23 $4,320 7 June 108 22 $4,032 8 July 16 $2,784 9 August 14 $2,688 10 September 127 21 $3,840 * EE Cut Copy Paste Options: 76 69 77 11 Reset to Match Style A Font... Change Chart Type... lå Save as Template... Select Data...

File Design Format Tell me why Data Review === D - View Developer Power Pivot Ep Wrap Text General 3Merge & Center - $ - %, Paste E too Home Insert Page Layout Formulas % Cut - 10 À À 5 Copy - * Format Painter BID- A- Clipboard Font : X for A B C D E Conditional Format as c Formatting Table Sty Styles Alignment Number D2 F G H I J K L M N Edit Series ? x Series name: E Select Range 1 Month 2 January 3 February 4 March 5 April 6 May 7 June 8 July 9 August 10 September 11 12 Number of Number of units Janitorial Janitorial produced workdays labor cost 115 21: $3,840 109 191 $3,648 102 23i $4,128 201 $3,456 23 $4,320 108 22 $4,032 77 16 $2,784 71 14! $2,688 127 21_$3,840 6 = 115, 109, 102,... Series X values: =Sheet15!$B$2:$B$10 Series y values: =Sheet15!$D$2:$D$10 10 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 6 OK = $3,840, $3,64... Cancel 13 15

Scatterplot $5,000 Janitorial labor cost 0 20 40 100 120 140 60 80 Number of units produced

To insert a scatterplot using the janitorial labor cost and number of work days, select the number of work days on the X axis as shown below

Home Insert Page Layout Formulas Data Review View Developer Power Pivot Design Format Tell me wl Add Chart Quick Element - Layout Chart Layouts Change Colors Chart Styles x for D2 4 А в с D E I F G H I K L M N Edit Series ? x Series name: Select Range Number of Number of units Janitorial Janitorial 1 Month produced workdays labor cost 2 January 115 21 $3,840 3 February 109 19: $3,648 4 March 102 23 $4,128 5 April 20 $3,456 6 May 23 $4,3201 7 June 108 $4,0321 8 July 77 161 $2,784 9 August 71 14 $2,688 10 September 127 21L $3,840 Chart Title 69 $5,000 B = 21, 19, 23, 20... 22 Series X values: = Sheet15!SC$2:$C$10 Series Y values: =Sheet15:$D$2:$D$10 @ OK = $3,840, 53,6... Cancel 11 12 13 $2,500 $2,000 $1,500 15

Scatterplot $5,000 $4,500 $4,000 Janitorial labor cost $2,000 $500 50 O 20 R 15 Number of Janitorial workdays 25

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c)

The number of workdays should be used as the activity base for explaining Janitorial labor cost because the number of units produced and Janitorial labor cost are not related. The production of units is performed by a different set of labor inputs and janitors are not part of those inputs. Janitors labor cost is directly related to the number of days they have worked and thus the number of workdays should be used as the activity base for explaining janitorial labor cost.