Oki Products, Ltd. has observed the following processing costs at various levels Units Produced Processing Cost Month 10 1 9 2 3 4 5 6 7 8 2,500 11,000 15,000 5,500 9,000 8,500 7,500 7,000 11,500 6,000 $28,000 52,000 59,000 38,000 47,000 52,000 44,000 41,000 52,000 41,000 past 10 mon equired: Prepare a scattergraph by plotting these data on a graph. Plot cost on the vertical axis and units produces the horizontal axis. Fit a line to your plotted points by visual inspection. What is the approximate monthly fixed cost? The approximate variable cost per unit processed? Show computations.
Oki Products, Ltd. has observed the following processing costs at various levels Units Produced Processing Cost Month 10 1 9 2 3 4 5 6 7 8 2,500 11,000 15,000 5,500 9,000 8,500 7,500 7,000 11,500 6,000 $28,000 52,000 59,000 38,000 47,000 52,000 44,000 41,000 52,000 41,000 past 10 mon equired: Prepare a scattergraph by plotting these data on a graph. Plot cost on the vertical axis and units produces the horizontal axis. Fit a line to your plotted points by visual inspection. What is the approximate monthly fixed cost? The approximate variable cost per unit processed? Show computations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Applying the Scattergraph Method
Oki Products, Ltd. has observed the following processing costs at various levels of activity over the past 10 month
Month
10
1
2
3
9
4
5
6
7
8
Units
Produced
2,500
11,000
15,000
5,500
9,000
8,500
7,500
7,000
11,500
6,000
Processing
Cost
$28,000
52,000
59,000
38,000
47,000
52,000
44,000
41,000
52,000
41,000
Required:
1. Prepare a scattergraph by plotting these data on a graph. Plot cost on the vertical axis and units produced on
the horizontal axis. Fit a line to your plotted points by visual inspection.
2. What is the approximate monthly fixed cost? The approximate variable cost per unit processed? Show your
computations.
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