EXERCISE 32 Scattergraph Analysis [ LO2 ] Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15 months: Month Units Produced Processing Cost 1 ........................... 4,500 $38,000 2 ........................... 11,000 $52,000 3 ........................... 12,000 $56,000 4 ........................... 5,500 $40,000 5 ........................... 9,000 $47,000 6 ........................... 10,500 $52,000 7 ........................... 7,500 $44,000 8 ........................... 5,000 $41,000 9 ........................... 11,500 $52,000 10 ........................... 6,000 $43,000 11 ........................... 8,500 $48,000 12 ........................... 10,000 $50,000 13 ........................... 6,500 $44,000 14 ........................... 9,500 $48,000 15 ........................... 8,000 $46,000 ExercisesRequired: 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. EXERCISE 33 High-Low Method [ LO3 ] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotels business is highly seasonal, with peaks occurring during the ski season and in the summer.Month Occupancy-Days Electrical Costs January ............................................. 1,736 $4,127 February ........................................... 1,904 $4,207 March ................................................ 2,356 $5,083 April .................................................. 960 $2,857 May ................................................... 360 $1,871 June .................................................. 744 $2,696 July ................................................... 2,108 $4,670 August .............................................. 2,406 $5,148 September ........................................ 840 $2,691 October ............................................. 124 $1,588 November ......................................... 720 $2,454 December ......................................... 1,364 $3,529 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? EXERCISE 34 Contribution Format Income Statement [ LO4 ] The Alpine House, Inc., is a large retailer of winter sports equipment. An income statement for the companys Ski Department for a recent quarter is presented below:

Department for a recent quarter is presented below: The Alpine House, Inc. Income StatementSki Department For the Quarter Ended March 31 Sales ............................................................ $150,000 selling price per unit of skis.................................$750 Variable selling expenses per pair of skies.............$50 Variable administrative expenses per pair of skie....$10

Total fixed selling ..............................................$20,000

Total fixed administrative expenses.....................$20,000

Beginning menchandise inventory.......................$30,000

Ending merchandise inventory...........................$40,000

Merchandise purchases...................................$100,000

Required:

1. Prepare a traditional income statement for quarter ended march 31 . 2. Prepare a contribution format income statement for the quarter ended march 31. 3. What was the contribution toward fixed expenses and profits for each pair of skissold during the quarter?