Oki Products, Ltd. has observed the following processing costs at various levels of activity over the past 10 months:

Required:

1. Prepare a scattergraph by plotting these data on a graph. Plot cost on the vertical axis and units produced on the horizontal axis. Fit a line to your plotted points by visual inspection.

2. What is the approximate monthly fixed cost? The approximate variable cost per unit processed? Show your computations.

Units Processing Produced Month Cost 2,500 1 $28,000 2 11,000 52,000 3 15,000 59,000 5,500 4 38,000 9,000 47,000 8,500 52,000 7,500 44,000 7,000 41,000 52,000 11,500 10 6,000 41,000