Question

Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations:

Month	Labor-Hours			Machine-Hours			Overhead Costs
1		4,200			7,300		$	516,500
2		4,100			7,700			521,500
3		4,000			8,300			552,000
4		4,300			7,800			544,000
5		4,500			8,500			584,000
6		4,400			8,400			575,000
7		4,300			7,500			538,000
8		4,200			7,100			513,000
9		4,100			7,800			535,000
10		4,600			8,400			568,000
11		3,900			7,000			506,000
12		4,100			8,700			567,000

Required:

Prepare a scattergraph based on the overhead and machine-hour data.

1. On the graph below, use the point tool to plot the point corresponding to machine-hours and overhead costs (Month 1).

2. Repeat the same process for the plotter tools (Month 2, Month 3,....).

3. To enter exact coordinates, double click on the point and enter the exact co-ordinates of x and y.

Answer 1

Q.1)

Overhead Cost 600000 500000 400000 300000 Overhead Cost 200000 100000 2000 4000 6000 8000

Q 2)

Overhead Cost OVERHEAD COST 590000 580000 570000 8 560000 550000 540000 530000 520000 510000 500000 • Overhead Cost 0 2000 4000 6000 8000 10000 MACHINE HOURS