Biology Forums - Study Force

The Melina Corporation has gathered the following data on its copy machine costs for the first eight months of the year.

Month

Number of Copies

Total Copy Cost

January	60,000	$ 7,400
February	50,000	6,500
March	70,000	7,000
April	90,000	9,200
May	80,000	7,600
June	100,000	8,500
July	120,000	10,000
August	110,000	9,800

Required:

Use 5 decimals on 'per unit' amounts.

a.	Prepare a scattergraph of the cost information and then choose a line that you believe

best represents the cost function. Represent your 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 in the form, y = mx + b.

e.	Using your cost equation from part (d), provide your best estimate of the copy costs

for
September if 68,000 copies will be made. Why does your estimate differ from the
$7,000 cost incurred in March, when 70,000 copies were made rather than 68,000?

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