Question: A company reports the following information about its sales and its cost of sales. Each unit of its product sells for $500. Use these data to prepare a scatter diagram. Draw an estimated line of cost behavior and determine whether the cost appears to be variable, fixed, or mixed.
Period Sales Cost of Sales
1 . . . . . . . . . . . . . . $15,000 $10,100
2 . . . . . . . . . . . . . . 11,500 7,500
3 . . . . . . . . . . . . . . 10,500 7,000
4 . . . . . . . . . . . . . . 7,500 5,500
5 . . . . . . . . . . . . . . 9,000 6,000
6 . . . . . . . . . . . . . . 12,500 9,500