Unformatted text preview: n methods, and
evaluation of production methods, and
material, labour and overhead
material, labour and overhead
requirements.
requirements.
requirements.
requirements.
LO 2 631 The Scattergraph Method
Plot the data points on a graph
Plot the data points on a graph
Plot
Plot
(total cost vs. activity).
((total cost vs. activity).
(total
total Maintenance Cost
1,000’s of Dollars Y
20 **
** 10 0 * ** *
** 0 1 2 3 4 X Patientdays in 1,000’s
LO 2 632 The Scattergraph Method Maintenance Cost
1,000’s of Dollars Draw a line through the data points with about an
Draw a line through the data points with about an
Draw
equal numbers of points above and below the line.
equal numbers of points above and below the line.
equal
equal
Y
20 **
** 10 0 * ** *
** 0 1 2 3 4 X Patientdays in 1,000’s
LO 2 633 The Scattergraph Method Maintenance Cost
1,000’s of Dollars Use one data point to estimate the total level of activity
Use one data point to estimate the total level of activity
Use
and the total cost.
and the total cost.
Y Total maintenance cost = $11,000
20 * ** *
** **
** 10 Intercept = Fixed cost: $10,000 0 0 1 2 3 4 X Patientdays in 1,000’s
Pati...
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 Winter '07
 ManagerialAccounting
 relevant range, Fixed Monthly, Curvilinear Cost

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