1. Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scaleof 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the y-axis.2. Using the line of best-fit, determine the company’s fixed cost per month and thevariable cost per unit. (Use 0 & 5,000 units.) The table below shows monthly data collected on production costs and on the number ofunits produced over a twelve month period.Level of Activity(Units Produced)MonthTotal ProductionCostsJuly$230,0003,500August250,0003,750September260,0003,800October220,0003,400November340,0005,800December330,0005,500January200,0002,900February210,0003,300March240,0003,600April380,0005,900Маy350,0005,600June290,0005,000

Introduction: The phrase "production costs" refers to all of the direct and indirect costs…

Answered: 1. Prepare the scatter diagram and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale
of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the y-axis.

2. 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.)

The table below shows monthly data collected on production costs and on the number of
units produced over a twelve month period.
Level of Activity
(Units Produced)
Month
Total Production
Costs
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
Маy
350,000
5,600
June
290,000
5,000

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