Required: 1. Prepare a scattergraph using the above data. Plot cost on the vertical axis and activity on the horizontal axis. Fit a line to your plotted points using a ruler. 2. Using the quick-and-dirty method, what is the approximate monthly fixed cost? The approximate vari- able cost per unit processed? Show your computations.

Required: 1. Prepare a scattergraph using the above data. Plot cost on the vertical axis and activity on the horizontal axis. Fit a line to your plotted points using a ruler. 2. Using the quick-and-dirty method, what is the approximate monthly fixed cost? The approximate vari- able cost per unit processed? Show your computations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

EXERCISE 3-2 Scattergraph Analysis [LO2]
Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15
months:
Units
6
7
8
9
10
11
12
13
14
15
Required:
1. Prepare a scattergraph using the above data. Plot cost on the vertical axis and activity on the horizontal
axis. Fit a line to your plotted points using a ruler.
2.
Using the quick-and-dirty method, what is the approximate monthly fixed cost? The approximate vari-
able cost per unit processed? Show your computations.
Processing
10,500
7,500
5,000
11,500
6,000
8,500
10,000
6,500
9,500
8,000
$52,000
$44,000
$41,000
$52,000
$43,000
$48,000
$50,000
$44,000
$48,000
$46,000

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