For the last eight months of 2009, Jo Company incurred the following activity levels and Shipping Department Costs:
Month Number of Shipments Shipping Department Costs
May 1,800 $14,700
June 1,900 15,200
July 1,700 13,700
August 1,600 14,000
September 1,500 14,300
October 1,300 13,100
November 1,100 12,800
December 1,500 14,600
(a) What is the variable cost per shipment ? Why ?
(b) What is the fixed costs per month ?
(c) What linear formula may be used to estimate shipping costs ?
(d) What is the estimated shipping costs in a month with 2,000 shipments ? Why ?