The data below have been taken from the cost records of the Atlanta Processing Company. The data

relate to the cost of operating one of the company$$s processing facilities at various levels of activity:

Units Total

Month Processed Cost

January $........8,000$ $$14,000$

February. $.......4,500$ $$10,000$

March $..........7,000$ $$12,500$

April $...........9,000$ $$15,500$

May $...........3,750$ $$10,000$

June $...........6,000$ $$12,500$

July. $...........3,000$ $$8,500$

August $.........5,000$ $$11,500$

EXERCISE $5-1$ Fixed and Variable Cost Behavior $[$ LO$1]$

Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly

expense of a coffee stand is $$1,100$ and the variable cost per cup of coffee served is $$0\mathrm{.}26.$

Required:

$1.$ Fill in the following table with your estimates of total costs and cost per cup of coffee at the indi$-$

cated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth

of a cent.

Exercises

$218$ Chapter $5$

Required:

$1.$ 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 computation