FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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EXERCISE 3-2 Scattergraph Analysis [LO2]
Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15
months:
Units
6
7
8
9
10
11
12
13
14
15
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 vari-
able cost per unit processed? Show your computations.
Processing
10,500
7,500
5,000
11,500
6,000
8,500
10,000
6,500
9,500
8,000
$52,000
$44,000
$41,000
$52,000
$43,000
$48,000
$50,000
$44,000
$48,000
$46,000
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Transcribed Image Text:EXERCISE 3-2 Scattergraph Analysis [LO2] Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15 months: Units 6 7 8 9 10 11 12 13 14 15 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 vari- able cost per unit processed? Show your computations. Processing 10,500 7,500 5,000 11,500 6,000 8,500 10,000 6,500 9,500 8,000 $52,000 $44,000 $41,000 $52,000 $43,000 $48,000 $50,000 $44,000 $48,000 $46,000
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