Scatter graph method
Using the data in P4-2 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.
3. Determine the cost to be charged to the product for the year.
4. Determine the cost to be charged to factory overhead for the year.
5. Do these answers agree with the answers to P4-2? Why or why not?
P4-2
Units
Cost
January
2,400
$4,400
July
2,200
February
2,300
4,300
August
2,100
4,100
March
4,200
September
2,000
3,800
April
4,000
October
1,400
3,400
May
1,800
November
1,900
3,700
June
3,900
December
4,050
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