Answer the following questions: 1) The president of the company has no confidence in the high-low method and would like you to check your results using a scattergraph. Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Use a ruler to fit a straight line to your plotted points. Using your scattergraph, estimate the approximate variable cost per unit shipped and the approximate fixed cost per month. 2) Assume that 9 units are budgeted for the month of August. Use the cost formula above to calculate: The total variable cost for shipping for the month of August The total cost of shipping for the month of August
Answer the following questions: 1) The president of the company has no confidence in the high-low method and would like you to check your results using a scattergraph. Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Use a ruler to fit a straight line to your plotted points. Using your scattergraph, estimate the approximate variable cost per unit shipped and the approximate fixed cost per month. 2) Assume that 9 units are budgeted for the month of August. Use the cost formula above to calculate: The total variable cost for shipping for the month of August The total cost of shipping for the month of August
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The data that follows bellow relates to units that were shipped and total shipping expense have been brought together by Svarog Company, a wholesaler of large, custom-built solar water heaters for private family:
| Months | Units shipped | Total Shipping Expense |
| Jan | 3 | $1800 |
| Feb | 6 | $2300 |
| Mar | 4 | $1700 |
| Apr | 5 | $2000 |
| May | 7 | $2300 |
| Jun | 8 | $2700 |
| Jul | 2 | $1200 |
Answer the following questions:
1) The president of the company has no confidence in the high-low method and would like you
to check your results using a scattergraph.
- Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity
on the horizontal axis. Use a ruler to fit a straight line to your plotted points. - Using your scattergraph, estimate the approximate variable cost per unit shipped and the
approximate fixed cost per month.
2) Assume that 9 units are budgeted for the month of August. Use the cost formula above to
calculate:
- The total variable cost for shipping for the month of August
- The total cost of shipping for the month of August
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