Question
Air Company is a wholesaler of custom-built air conditioning and heating units for commercial buildings. The data below show the number of units shipped and
Air Company is a wholesaler of custom-built air conditioning and heating units for commercial buildings. The data below show the number of units shipped and the total shipping expenses for the past whole year.
Month | Units Shipped | Total Shipping Expenses |
October, 2021 | 12 | $ 7,300 |
November, 2021 | 11 | $ 7,000 |
December, 2021 | 10 | $ 6,600 |
January, 2022 | 3 | $ 2,900 |
February, 2022 | 6 | $ 4,600 |
March, 2022 | 4 | $ 3,400 |
April, 2022 | 5 | $ 4,000 |
May, 2022 | 7 | $ 5,000 |
June, 2022 | 8 | $ 5,400 |
July, 2022 | 2 | $ 2,400 |
August, 2022 | 1 | $ 1,200 |
September, 2022 | 9 | $ 6,000 |
Required:
Prepare a graph using the above data (use either Microsoft Excel or by hand on paper). Shipping expenses will be on the vertical axis and units shipped will be on the horizontal axis.
Does the relation between shipping expenses and the number of units shipped appear to be linear? Explain your response.
Based on a visual inspection of the graph, do you think shipping expense is a true variable cost or a mixed cost? Explain.
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