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Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong...

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Accounting

Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong customer service focus and knows that branch visits can be important in fostering a reputation for good customer service. However, as internet banking increases in popularity, the financial staff at Fordson question whether the costs of the branch are worth it.

As part of looking at the question, a financial analyst has collected monthly data on the number of customer visits to the branch and the operating cost of the branch over the last fiscal year. The data follow:

Month Customer Visits Branch Cost
1 962 $ 79,270
2 1,378 101,110
3 1,170 90,190
4 1,014 82,000
5 1,586 112,030
6 1,222 92,920
7 1,144 88,825
8 1,248 94,285
9 1,430 103,840
10 1,040 83,365
11 1,092 86,095
12 1,066 84,730

Estimate the monthly fixed costs and the unit variable cost per customer visit using the high-low estimation method.

branch cost = ____+______ per visit x customer visits

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