Reference no: EM133973527

Problem

Delaney Company's shipping expenses had fluctuated a fair amount over the past eight quarters, as had the volume of units sold. To better understand these costs, members of the accounting team plotted the quarterly observations for the past two years, estimated a cost function using the regression method, and drew the line shown in the following plot. Others on the team estimated a cost function using the same data but according to the high-low method and also drew their line into the plot. A line and scatter graph titled, Scatterplot, compares shipping expense to units sold. The vertical axis labeled, Shipping Expense, ranges from 0 to $250,000, in increments of 50,000. The horizontal axis labeled, Units Sold, ranges from 0 to 25,000, in increments of 5,000. Two lines are plotted on the graph. A line with a positive slope is plotted from (10,000, 145,000) to (22,000, 190,000). A dotted line with a positive slope is plotted from (10,000, 110,000) to (22,000, 190,000). Six data points are plotted and are scattered. Get the instant assignment help. They form an approximate trend curve that rises up and down with a positive slope as it moves to the right along the positive sloping line. The scatterplot is plotted with a positive slope ranges between (13,500, 120,500) to (18,000, 200,000). All values are approximate. Assuming the accounting team agrees on one of these models to use, how will it use the model going forward?