1. Determine the variable cost per unit and the fixed cost using the high-low method.2. What is the equation of the total mixed cost function?3. Prepare the scatter diagram, clearly showing any outliers.4. Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.)5. In view of the department’s cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer. The table below shows monthly data collected on production costs and on the number ofunits produced over a twelve month period.MonthTotal ProductionLevel of Activity(Units Produced)CostsJuly$230,0003:500August250,0003,750September260,0003,800October220,0003,400November340,0005,800December330,0005:500January200,0002,900FebruaryMarch210,0003:300240,0003,600April380,0005,900Мay350,0005,600June290,0005,000

Since you have asked multiple questions, we will solve the first question for you. If you want any…

Answered: 1. Determine the variable cost per unit…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

1. Determine the variable cost per unit and the fixed cost using the high-low method.
2. What is the equation of the total mixed cost function?
3. Prepare the scatter diagram, clearly showing any outliers.
4. Using the line of best-fit, determine the company’s fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.)
5. In view of the department’s cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer.

The table below shows monthly data collected on production costs and on the number of
units produced over a twelve month period.
Month
Total Production
Level of Activity
(Units Produced)
Costs
July
$230,000
3:500
August
250,000
3,750
September
260,000
3,800
October
220,000
3,400
November
340,000
5,800
December
330,000
5:500
January
200,000
2,900
February
March
210,000
3:300
240,000
3,600
April
380,000
5,900
Мay
350,000
5,600
June
290,000
5,000

Expert Solution

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions