Predict the total cost in a month when 5500 tests are

Question

Plasma Pathology has incurred the following costs in its diagnostic blood laboratory during the past 12 months:

Month	Number of blood test completed	Cost
January	6100	$90000
February	5300	87000
March	4900	76200
April	4800	78100
May	5050	80700
June	3050	61000
July	4500	74500
August	7100	99000
September	6200	95600
October	4700	74800
November	5900	89000
December	6000	91000

Additional Requirement: Lecture illustration 1

Estimate the monthly fixed cost and the variable cost per blood test using the high-low method.

Develop a formula to express the cost behaviour exhibited by Plasma Pathology's costs.

Predict the total cost in a month when 5500 tests are performed.

Lecture Illustration 2 - Estimating cost behaviour; regression analysis

Use the same data as above.

Required:

1. Use regression analysis to estimate the variable cost per blood test and the fixed cost per month.
2. Develop a formula to express the cost behaviour exhibited by Plasma Pathology's costs.
3. Predict the total cost in a month when 5500 tests are performed.