A) Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 )
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
The table below shows monthly data collected on production costs and on the number of units produced over a twelve-month period.
|
Month |
Total Production Costs |
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 |
A) Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 )
B) In view of the department’s cost behavior pattern, which of the two methods appear more appropriate? Explain your answer.
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