,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000
The table below shows monthly data collected on production costs and on the number of
units produced over a twelve month period.
Month Total ProductionCosts Level of Activity(Units Produced)
July $230,000 3,500
August 250,000 3,750
September 260,000 3,800
October 220,000 3,400
November 340,000 5,800
December 330,000 5,500
January 200,000 2,900
February 210,000 3,300
March 240,000 3,600
April 380,000 5,900
May 350,000 5,600
June 290,000 5,000
d) Using the line of best-fit, determine the company’s fixed cost per month and the
variable cost per unit. (Use 0 & 5,000 units.) please explain the figures got
e) In view of the department’s cost behaviour pattern, which of the two methods
appear more appropriate? Explain your answer.
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