Oki Products, Ltd. has observed the following processing costs at various levels of activity over the past 10 months:

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.

Transcribed Image Text:

Units Processing Produced Month Cost 2,500 1 $28,000 2 11,000 52,000 3 15,000 59,000 5,500 4 38,000 9,000 47,000 8,500 52,000 7,500 44,000 7,000 41,000 52,000 11,500 10 6,000 41,000