Question

The Aust 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 46,000 $4,600 February 42,000 $4,400 March 58,000 $5,300 April 64,000 $6,300 May 57,000 $5,000 June 62,000 $5,800 July 68,000 $6,500 August 71,000 $7,300 (a) Incorrect answer iconYour answer is incorrect. Assuming the line intersects the y-axis at $500 and using the July activity levels what is the equation of the line that would be drawn for a scattergraph. (Round variable cost to 3 decimal places, e.g. 15.251 and fixed cost to 0 decimal places, e.g 1,234.)

Answer 1

Answer:

following a linear equation:

y = mx + b

if we use July's data:

y = $0.0882m + 500

where

y = total cost

m = number of copies

the slope = 1 / 11.3333 = 0.0882

Explanation:

Month          Number of Copies       Total Copy Cost

January            46,000                          $4,600

February          42,000                          $4,400

March              58,000                           $5,300

April                 64,000                           $6,300

May                  57,000                          $5,000

June                62,000                           $5,800

July                 68,000                           $6,500

August            71,000                            $7,300

y = mx + b

6,500 = 68,000x + 500

x = variable cost per unit = (6,500 - 500) / 68,000 = $0.088235294 per copy ≈ $0.0882 per copy

the equation would be:

y = $0.0882m + 500

the slope = 1 / 11.3333 = 0.0882