Discussion Question 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 Level of Activity (Units Produced) 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

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
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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) Which of the two methods appear more appropriate, is it using the line of best-fit or using the high-low method to calculate the variable cost per unit and the fixed cost?

Discussion Question
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
Level of Activity
(Units Produced)
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
February
200,000
2,900
210,000
3,300
Мarch
240,000
3,600
April
380,000
5,900
Мay
350,000
5,600
June
290,000
5,000
Transcribed Image Text:Discussion Question 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 Level of Activity (Units Produced) 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 February 200,000 2,900 210,000 3,300 Мarch 240,000 3,600 April 380,000 5,900 Мay 350,000 5,600 June 290,000 5,000
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