Show the total cost line on the scatter diagram

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Reference no: EM135919

Alden Co.'s monthly cost and sales data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

Month Sales Total Cost Month Sales Total Cost

1 $325,000 $162,500 7 $355,000 $242,000

2 170,000 106,250 8 275,000 156,750

3 270,000 210,600 9 75,000 60,000

4 210,000 105,000 10 155,000 135,625

5 295,000 206,500 11 99,000 99,000

6 195,000 117,000 12 105,000 76,650

1. Purpose a Scatter diagram for these data with sales volume (in $) plotted on the total cost and horizontal axis plotted on the vertical axis

2. Evaluate both the variable costs per sales dollar and the total monthly fixed costs using the high-low method. Show the total cost line on the scatter diagram in part 1.

3. Use the evaluated line of cost behavior and results from part 2 to predict future total cost when sales volume is $380,00 and $420,000.

Reference no: EM135919

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