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Scattergraph Analysis; High-Low Method

Month X-Rays Taken X-Ray Costs
January...... 6,250 $28,000
February..... 7,000 29,000
March........ 5,000 23,000
April........ 4,250 20,000
May.......... 4,500 22,000
June......... 3,000 17,000
July......... 3,750 18,000
August....... 5,500 24,000
September.... 5,750 26,000

1.Prepare a scattegraph using the data. Plot cost on the vertical axis
and activity on the horizontal axis. Fit a line to your plotted points.
2.Using the quick-and-dirty method, what is the approximate monthly fixed
cost for X-Rays? The approximate variable cost per X-ray taken?
3.Scrutinize the points on your graph, and explain why the high-low method
would or would not yield an accurate cost formula in this situation.

I came up with, approx 15,000 fixed and 12,500 variable.
(27,500-15,000) is this accurate? also would like to see your graph to see if it resembles mine.

Solution Summary

The solution provides a scattergraph analysis. The expert uses the high-low method.

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