A management accountant is studying the relationship between the number of units of output in one...

Transcribed Image Text:

A management accountant is studying the relationship between the number of units of output in one year and the total cost incurred fro a given product. From the records of the firm, the following data was extracted: Output, Q Total Cost, C 0 120 1 124 3 120 5 140 a) b) c) Determine the firm's fixed cost. Plot the above data on a graph and hence recommend the best functional from within the given range. Without prejudice to your answer in b) above, fit a 3rd degree polynomial to the data above, i.e. of the form: C=a+ b₂Q+b₂Q²+b3Q³ and hence estimate the total cost if level of output equals eleven (11) units. A management accountant is studying the relationship between the number of units of output in one year and the total cost incurred fro a given product. From the records of the firm, the following data was extracted: Output, Q Total Cost, C 0 120 1 124 3 120 5 140 a) b) c) Determine the firm's fixed cost. Plot the above data on a graph and hence recommend the best functional from within the given range. Without prejudice to your answer in b) above, fit a 3rd degree polynomial to the data above, i.e. of the form: C=a+ b₂Q+b₂Q²+b3Q³ and hence estimate the total cost if level of output equals eleven (11) units.