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c) Prepare the scatter diagram, clearly showing any outliers. 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.) e) In view of the department’s cost behavior pattern, which of the two methods appear more appropriate? Explain your answer.

c) Prepare the scatter diagram, clearly showing any outliers. 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.) e) In view of the department’s cost behavior pattern, which of the two methods appear more appropriate? Explain your answer.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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c) Prepare the scatter diagram, clearly showing any outliers.

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.)

e) In view of the department’s cost behavior pattern, which of the two methods appear more appropriate? Explain your answer.

The table below shows monthly data collected on production costs and on the number o 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 Мay 350,000 5,600 June 290,000 5,000
Transcribed Image Text:The table below shows monthly data collected on production costs and on the number o 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 Мay 350,000 5,600 June 290,000 5,000
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