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Question - Caterpillar' executive Manager has requested a quick estimate of the production supplies needed for the TALABAY for the month of December when production is planned to be 470,000 units to meet the desired ending inventory needs and sales of 475,000 units. Caterpillar's budget analyst has the following actual data for the last 3 months:
Month
Production in Units
Manufacturing Supplies
August
450,000
$723,060
September
540,000
853,560
November
480,000
766,560
Required - Using these data and the high-low method to develop a cost estimating equation, what the estimate of needed manufacturing supplies for December?
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