Question 1:

a) Scatterplot:

SCATTERPLOT
180000

160000

140000

120000
Actual Cost

100000

80000

60000

40000

20000

0
800 1000 1200 1400 1600 1800 2000 2200
Actual Units

B.

Fixed cost is equal to $ 100,000 which is the spot that the line meets Y axis. Whereas the
calculation for variable cost is as follows.

Variable cost = (y2 – y1) ÷ (x2 – x1)

Variable cost = (162,000 – 100,000) ÷ (1,970 – 0)

Variable cost = (62,000) ÷ (1,970)

VC = 31.47

C.

First step (sorting data):

970,1000,1100,1175,1200,1210,1250,1410,1450,1510,1520,1600,1600,1650,1700,1710,1800,
1850, 1890,1900,1970,1970.

Second step (Median):

Median = 22 ÷ 2

Median = 11

Median would be

= (1520 + 1600) ÷ 2

= 1560

Third step (Quartile 1):

Q1 is the middle value from the first half of the data set. Which is from 970 to 1520. There are 11
values and as 11 is odd, we will have to take a median to get the accurate 5.5th value.

Q1 = (1200 + 1210) ÷ 2

Q1 = 1,205

Third step (Quartile 1):

Q3 is the middle value from the second half of the data set. Which is from 1600 to 1970. There are
11 values and as 11 is odd, we will have to take a median to get the accurate 5.5th value.

Q3 = (1710 + 1800) ÷ 2

Q3 = 1,755

Fourth step (Finding IQR):

IQR = Q3 – Q1

IQR = 1,755 – 1,205

IQR = 550

Fifth step (upper fence or high outliners):

Any values exceeding the upper fence are outliners.

= Q3 + (1.5×IQR)

= 1755 + (1.5×550)

= 2580

HENCE THERE ARE NO OUTLINERS

Sixth step (lower fence or low outliners):

Any values less than the lower fence are outliners.

= Q1 - (1.5×IQR)

= 1,205 - (1.5×550)

= 380

HENCE THERE ARE NO OUTLINERS.

d) The activity range is from 970 to 1970.

Question 2:

Given:

MCH = $ 162,000

MCL = $ 100,000

AH = $ 1,970

AL = $ 970

VC =?

FC =?

Calculation for VC and FC:

Variable cost = (MCH – MCL) ÷ (AH – AL)

Variable cost = (162,000 – 100,000) ÷ (1,970 – 970)

Variable cost = (62,000) ÷ (1,000)

Variable cost = $ 62

Fixed Cost = MCH – (VC × AL)

Fixed Cost = 162,000 – (62 × 970)

Fixed Cost = 162,000 – (60,140)

Fixed Cost = $ 101,860SS

Equation:

Y = 101,860 + 62x

Question 3