Variables in addition to number of service reports

Assignment Help Financial Accounting

Reference no: EM13915896

May Lau is examining customer-service costs in the Shatin branch of Unique Products. Unique Products has more than 200 separate electrical products that are sold with a six-month guarantee of full repair or replacement with a new product. When a product is returned by a customer, a service report is prepared. This service report includes details of the problem and the time and cost of resolving the problem. Weekly data for the most recent 8-week period are as follows:

Week Customer Service Department Costs Number of Service Reports

1 $27,400 190

2 41,800 275

3 26,000 115

4 37,600 395

5 28,000 265

6 43,000 455

7 33,800 340

8 42,000 305

Required

a. Use the high-low method to compute the cost function, relating customer-service costs to the number of service reports

b. Suggest what variables, in addition to number of service reports, might be the cost drivers of weekly customer -service costs of Unique Products.

Reference no: EM13915896

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