Scatter graph method
Using the data in E4-2 and a piece of graph paper:
1. Plot the data points on the graph and draw a line by visual inspection, indicating the trend shown by the data points.
2. Determine the variable cost per unit and the total fixed cost from the information on the graph.
E4-2
Indirect Labor Hours
Indirect Labor Costs
January
400
$6,000
February
500
7,000
March
600
8,000
April
700
9,000
May
$800
10,000
June
900
11,000
3,900
$51,000
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