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    Fixed and variable costs with the Scattergraph method

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    Month Machine Hours Utility Cost
    Jan 200 $300
    Feb 325 440
    March 400 480
    April 410 490
    May 525 620
    June 680 790
    July 820 840
    Aug 900 900

    1. Determine the fixed and variable costs using:
    A. Scattergraph Method
    B. High-Low Method

    2. Determine the cost formula using both methods.

    3. Within the relevant range, can the formula be reliably used to predict utility cost? Can the a and b values in the cost formula be interpreted as fixed and variable costs? Why or why not?

    4. Using both formulas predict the utility cost in a month the uses 850 machine hours?

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    https://brainmass.com/business/accounting/fixed-variable-costs-scattergraph-method-455339

    Solution Preview

    Please see attachment.

    HIGH LOW METHOD

    Month Machine Hours Utility Cost
    Jan 200 300
    Feb 325 440
    Mar 400 480
    Apr 410 490
    May 525 620
    Jun 680 790
    Jul 820 840
    Aug 900 900

    1. Determine the fixed and variable costs using:
    A. Scatter graph Method

    Fixed cost $145.36
    Variable cost $0.87

    B. High-Low ...

    Solution Summary

    The fixed and variable costs with the scattergraph methods are examined.

    $2.19

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