Oki products ltd has observed the following processing

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Oki Products, LTD., has observed the following processing costs at various levels of activity over last 15 months:

Month

Units Produced

Processing Cost

1

4,500

$38,000

2

11,000

$52,000

3

12,000

$56,000

4

5,500

$40,000

5

9,000

$47,000

6

10,500

$52,000

7

7,500

$44,000

8

5,000

$41,000

9

11,500

$52,000

10

6,000

$43,000

11

8,500

$48,000

12

10,000

$50,000

13

6,500

$44,000

14

9,500

$48,000

15

8,000

$46,000

Use the company's historical data for months 1 to 15 and

(i)  Find the High-Low equation for this company, and then

(ii) Use the High-Low equation to predict the processing cost for month 20 when the company plans to produce 7,000 units, and also

(iii) use the High-Low equation to predict the processing cost for month 21 when the company plans to produce 10,300 units.

Reference no: EM13578906

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