Woodfield Company makes bed linens. During the first six months of 2012, Woodfield had the following production costs:

Required:
1. Use the high-low method to compute the monthly fixed cost and the variable cost rate.
2. Plot the costs on a scattergraph.
3. Interpretive Question: Based on your scattergraph, do you think the fixed costs and the variable cost rate determined in part (1) are accurate?Why?

Transcribed Image Text:

Units Produced Month Total Costs S 68,000 100,000 90,000 52,000 94,000 74,000 January February March 10,000 20,000 15,000 8,000 17,000 12,000 April May June