23. Graphing Mixed Cost During the past operating year, Davenport Corporation had the following monthly volume of production and total monthly maintenance expense: L01,2,3 Maintenance Expense January......... February..... March ......... April ........ May........ June ........... Units Produced 123,000 147.000 159,000 133,000 143,000 153,000 $28,600 31,600 33,000 29,400 31,200 32,600 July .. ** August ........ September .... October....... November. ...... December. ...... Units Produced 127.000 157.000 131,000 163,000 155,000 159,000 Maintenance Expense $29.000 32,800 29,600 33,400 32,600 33,000 Required Assume that all volumes are in the relevant range. a. Explain why the data indicate that the maintenance expense is neither a fixed nor a variable expense. b. Construct a graph similar to the one in Exhibit 6-7 and plot the maintenance expense data. C. Fit a line (by sight) to the cost observation points, and estimate the cost formula. d. Confirm your answer in requirement (c) with high-low analysis. Scattergraph Method Exhibit 6-7 $40,000 $35,000 $30,000 Total Cost $25,000 HINT: Where the scattergraph plot line intersects the y-axis represents the fixed cost componentie, the cost level at an activity level of zero) $4,500 10,000 20,000 60,000 70,000 30,000 40,000 50,000 Water Bottle Cages