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Oki Products, Ltd. has observed the following processing costs at various levels of activity over the past 10 months: Month Units Produced Processing Cost 1
Oki Products, Ltd. has observed the following processing costs at various levels of activity over the past 10 months: Month Units Produced Processing Cost 1 2,500 $28,000 2 11,000 52,000 3 15,000 59,000 4 5,500 38,000 01 5 9,000 47,000 6 8,500 52,000 7 7,500 44,000 00 8 7,000 41,000 9 11,500 52,000 10 6,000 41,000 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
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