Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15 months:

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 variable cost per unit processed? Show your computations.

Transcribed Image Text:

Processing Units Month Produced Cost $38,000 4,500 $52,000 11,000 $56,000 3 ... 12,000 $40,000 5,500 4 $47,000 9,000 10,500 $52,000 $44,000 7,500 $41,000 5,000 $52,000 11,500 10 .... $43,000 6,000 $48,000 8,500 11 $50,000 10,000 12 $44,000 6,500 13 $48,000 9,500 14 $46,000 8,000 15 .. 00