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The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month July August
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month July August September October November December January February March April May June Total Production Costs $230,000 250,000 260,000 220,000 340,000 330,000 200,000 210,000 240,000 380,000 350,000 290,000 Level of Activity (Units Produced) 3-500 3.750 3.800 3400 5,800 5.500 2.900 3.300 3.600 5.900 5.600 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method b) What is the equation of the total mixed cost function? c) Prepare the scatter diagram, clearly showing any outliers d) Using the line of best-fit, determine the company's fixed cost per month and the variable cost per unit. (use o 5,000 units.) e) In view of the department's cost behaviour pattern, which of the two methods appear more appropriate? Explain your
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