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Question - High-Low Method; Scattergraph Analysis
Zerbel Company, a wholesaler of large, custom-built air conditioning units for commrcial buildings, has noticed considerable fluctuation in its shipping expense from month to month, as shown in the attachment:
Month
Units Shipped
Total Shipping Expense
January
4
$2,200
February
7
$3,100
March
5
$2,600
April
2
$1,500
May
3
June
6
$3,000
July
8
$3,600
Using the high-low method, estimate the cost formula for shipping expense.
Explain why adjusting entries are necessary and describe the 4 types of adjusting entries, and provide a manufacturing industry example of each.
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