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P15-25. High-Low and Scatter Diagrams with Implications for Regression Midnight Cookie Company produces and delivers gourmet cookies and ice cream until 1:30 a.m. from its three Seattle area locations. Presented is monthly cost and sales information for cookies at one of Midnight's locations. This assignment requires the use of a computer spreadsheet such as Excel to solve. This assignment assumes previous knowledge of computer preadsheets. antridge Business Publishers Module 15 Cost Behavior, Activity Analysis, and Cost Estimation Month January February March April May. June Sales (Dozens) 6,800 7,800 5,500 1,000 6,100 4,500 Total Costs $30,650 35,336 29,700 25,000 30,600 28,670 2. Using the high-low method, develop a cost-estimating equation for total monthly costs. . 1. Plot the equation developed in requirement (a). 2. Using the same graph, develop a scatter diagram of all observations for the cookie shop. Select representative high and low values and draw a second cost-estimating equation. c. Which is a better predictor of future costs? Why? d. If you decided to develop a cost-estimating equation using least-squares regression analysis, should you include all the observations? Why or why not? c. Mention two reasons that the least-squares regression is superior to the high-low and scatter diagram methods of cost estimation

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