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?

Transcribed Image Text:

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