Scattergraph Analysis; Selection of an Activity BaseMapleleaf Sweepers of Toronto manufact...

Scattergraph Analysis; Selection of an Activity Base

Mapleleaf Sweepers of Toronto manufactures replacement rotary sweeper brooms for the large sweeper trucks that clear leaves and snow from city streets.The business is 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 itscustomers.Mapleleaf Sweepers makes all of its brooms to order,

The company has been analyzing its overhead accounts to determine fixed and variable components for planning purposes. Below are data for the company's janitorial labor costs over the last nine months. (Cost data are in Canadian dollars.)

The number of workdays varies from month to month due to the number of weekdays. holidays. days of vacation. and sick leave taken in the month,The number of units produced in a month varies depending on demand and the number of workdays in the month. There are two janitors who each work an eight-hour shift each workday. They each can take up to 10 days of paid sick leave each year. Their wages on days they call in sick and their wages during paid vacations are charged to miscellaneous overhead rather than to the janitorial labor cost account.

Required:

1. Plot the janitorial labor cost and units produced on a scattergraph. (Place cost on the vertical axis and units produced on the horizontal axis.)

2. Plot the janitorial labor cost and number of workdays on a scattergraph. (Place cost on the vertical axis and the number of workdays on the horizontal axis.)

3. Which measure of activity—number of units produced or janitorial workdays—should be used as the activity base for explaining janitorial labor cost?