Reference no: EM131538936

Question: Refer to the information from Exercise. Use spreadsheet software to use ordinary least-squares regression to estimate the cost equation, including fixed and variable cost amounts.

Exercise: Felix & Co. reports the following information about its sales and cost of sales. Draw an estimated line of cost behavior using a scatter diagram, and compute fixed costs and variable costs per unit sold. Then use the high-low method to estimate the fixed and variable components of the cost of sales.

Units                       Cost of
Period                        Sold                  Sales

1 . . . . . . . . . . . . . . 0                       $2,500

2 . . . . . . . . . . . . . . 400                      3,100

3 . . . . . . . . . . . . . . 800                      3,700

4 . . . . . . . . . . . . . . 1,200                    4,300

5 . . . . . . . . . . . . . . 1,600                    4,900

6 . . . . . . . . . . . . . 2,000                      5,500

7 . . . . . . . . . . . . . 2,400                      6,100

8 . . . . . . . . . . . . . 2,800                      6,700

9 . . . . . . . . . . . . . 3,200                      7,300

10 . . . . . . . . . . . . . 3,600                    7,900