Month Total Production Cost Level of Activity (units prodcued) ...
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Accounting
Month
Total Production Cost
Level of Activity
(units prodcued)
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
Januaury
200,000
2,900
February
210,000
3,300
March
240,000
3,600
April
380,000
5,900
May
350,000
5,600
June
290,000
5,000
a) Determine the variable cost per unit and the fixed cost using the high-low method.
b) What is the equation of the total mixed cost function?
c) Based on the High-Low method, what is the total production costs if 6,500 units are produced?
d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.
e) Using the line of best-fit, determine the companys fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.) f) Which of the two methods appear more appropriate? Explain your answer.
f) which one of the two methods appear more appropriate? explain your answer.
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