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.