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

MonthNumber of CopiesTotal Copy Cost
January60,000$ 7,400
February50,0006,500
March70,000 7,000
April90,000 9,200
May80,000 7,600
June100,000 8,500
July120,00010,000
August110,000 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?
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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amandashimkusamandashimkus
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2 months ago
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a.


The line intersects the y-axis at $3,500, representing total fixed costs. The line passes through the point (80,000, $7,600), so the slope can be calculated as follows:
($7,600 − $3,500) ÷ (80,000 - 0) = $0.05125 per copy
The equation of the line is: y = $.05125 per copy + $3,500

b.Variable cost = ($10,000 − $6,500) ÷ (120,000 - 50,000) = $0.05 per copy
c.Fixed cost = $10,000 - ($.05 × 120,000) = $4,000
d.y = $0.05x + $4,000
e.September cost = ($0.05 x 68,000) + $4,000 = $7,400. The equation is just an
approximation of the relationship between cost and copies. Since the March cost was not one of the points used to construct the line, it is not surprising that the two figures aren't equal.
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mariasmakatof Author
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2 months ago
Correct Slight Smile TY
amandamraz
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Yesterday
Thank you, thank you, thank you!
africa143
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2 hours ago
This site is awesome
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