the table below shows monthly data collected on production costs and o
The table below shows monthly data collected on production costs and on the number of units
produced over a twelve month period.
Level of Activity
5,000/na) 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) Based on the High-Low method, what is the total production costs if 6,500 units are
d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2
cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the y-
e) 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.)
f) Which of the two methods appear more appropriate? Explain your answer.
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