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Martha's Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The company's controller, Mathew Knight, has recently completed
Martha's Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The company's controller, Mathew Knight, has recently completed a cost study of the firm's material-handling department. Knight used work measurement to quantify the department's activity. The control factor unit used in the work-measurement study was hundreds of pounds of equipment unloaded or loaded at the company's loading dock. Knight compiled the following data. Month January February Units of Activity (hundreds of pounds of equipment loaded or unloaded) Material-Handling Department Costs $ 11,350 1,400 1,200 11,350 March April 1,100 11,050 2,600 12,120 May June 1,800 11,400 2,000 12,000 July 2,400 12,550 August 2,200 11,100 September 1,000 10,200 October 1,300 11,250 November 1,600 11,300 December 1,800 11,700 PR 6-41 (Static) Part 1: Draw a scatter diagram of the cost data for the material-handling department. Required: 1. Draw a scatter diagram of the cost data for the material-handling department. Scatter diagram of the cost data Material-handling costs $13,000 $12,500 $12,000 $11,500 $11,000 $10,500 $10,000 500 Tools January February March April May June 2. Estimate the variable and fixed components of the department's cost behavior pattern using the visually fit cost line. Fixed-cost component Variable cost per unit of activity 3. Using your estimate from requirement 3, specify an equation to express the department's cost behavior. Total Material-handling cost =
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