Kyo Co.s monthly sales and costs data for its operating activities of the past year follow. Management

Kyo Co.’s monthly sales and costs data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. (Dollar amounts are in thousands.)

Required
1. Prepare a scatter diagram for these data with sales volume (in $) plotted on the horizontal axis and total costs plotted on the vertical axis.
2. Estimate both the variable costs per sales dollar and the total monthly fixed costs using the high-low method. Draw the total costs line on the scatter diagram in part 1.
3. Use the estimated line of cost behavior and results from part 2 to predict future total costs when sales volume is
(a) $ 100
(b) $170.

Transcribed Image Text:

Month Sales Total Cost Month Sales Total Cost $ 97 87 73 89 81 110 7 $145 8 .185 $ 93 105 85 58 95 79 2..x125 3 105 4155 10 Il 12 85 175 215 115