The Salinas Corporation has gathered the following data on its copy machine costs for the first eight months of the year. Required a. Prepare a
The Salinas Corporation has gathered the following data on its copy machine costs for the first eight months of the year.
Required
a. Prepare a scattergraph of the cost information and then choose a line that you believe best represents the cost function. Represent your chosen line with a cost equation of the form y = mx + b. Show your calculations.
b. Using the high-low method, what is the variable cost per copy?
c. Using the high-low method, what is the fixed cost per month?
d. Using the high-low method, represent the cost function with a cost equation of the form y = mx + b.
e. Using your cost equation from part (d), provide your best estimate of the copy costs for September if 70,000 copies will be made. Why does your estimate differ from the $7,000 cost incurred in March?
Month Number of Copies Total Copy Cost $ 7,400 $ 6,500 $ 7,000 $ 9,200 $ 7,600 $ 8,500 $10,000 $ 9,800 January February March 60,000 50,000 70,000 90,000 80,000 100,000 120,000 110,000 April May June July August
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a The line intersects the yaxis at 3500 representing total fixed costs ... View full answer
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Managerial Accounting
Authors: Charles E. Davis, Elizabeth Davis
2nd edition
1118548639, 9781118800713, 1118338448, 9781118548639, 1118800710, 978-1118338445
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